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Winds And Corn Threaten to Raise Gas Prices

Price at the pump heading higher

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    NEWSLETTERS

    Consumer Bob Hansen

    Corn, fire and wind threaten to raise the price of gas. 

    Oil industry experts are looking at a number of factors taking place that could drive up oil prices. Tropical Storm Isaac is heading toward the Gulf Coast. As a result of the threat, oil companies are shutting down drilling platforms and coastal refineries. 

    When Katrina hit the same coastline it almost immediately drove up prices 40 cents a gallon.  Isaac is not expected to have the same impact but it could force up prices across the country.

    "Oil is fungible," said Dan Seiver with Reilly Financial Advisors, "So if there isn't enough supply available it has to be taken from somewhere else."

    The Midwest drought is driving up the price of corn. Corn is made into ethanol and used to blend with regular fuel. Oil analyst Trilby Lundberg says that is one of the main reasons for rising prices.

    Chris Alba filled up her gas tank in San Diego and said it might be time to start driving less.

    "I have a bus pass and a benchmark," said Alba, "Every time it goes close to $4.50 a gallon I start riding the bus."

    Refinery fires are also driving up speculation. An explosion and fire in Venezuela is cutting back the supply of fuel coming from that South American country.

    Closer to home, a refinery fire in Northern California is also cutting back on the fuel supply across the state. The Chevron Richmond refinery fire is one of the largest in the state.

    Gas station customer Jill Reese says she is frustrated by all the changes at the pump.

    "It doesn't make sense," said Reese, "What amazes me the most is that throughout the day they are up and they are down."
     

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