Gas prices surge in Northeast US

Gas prices have shot up to over $3.50 per gallon, late Thursday morning in the Northeast US. People are rushing to fill their tanks as some stations are reporting shortages of gasoline, and many oil wells were forced to shut down after Hurricane Katrina.

Meanwhile, gas prices dropped elsewhere and rose elsewhere. Saturday morning California had the highest reported price at GasPriceWatch.com. Another price service reported $3.05 as the U.S. average.

The federal government's weekly petroleum price summary reported U.S. average retail price for regular gasoline decreased by 0.2 cent to 261.0 cents per gallon. But supply shocks are likely as the distribution systems respond to bottlenecks. On Tuesday, August 30, CNN reported the price of U.S. crude oil rose to a record high $70.85 a barrel. However, prices fell $3.28 to $67.57 a barrel on Friday. In contrast, the crude oil in Europe, which is usually more expensive than US oil, was actually cheaper than in America; as London Brent Crude oil was down $1.15 to $66.57 a barrel. But as CNN reports, "European allies sprang to the rescue."