As oil continues to escape to the surface, many have asked how this will impact gasoline prices- will prices rise sharply? The short answer- no. The spill has so far had little to no impact on rising gasoline prices, but a major oil terminal may need to temporarily close which could cause prices to rise.

I'm not trying to send folks into a panic with this, just keep reading. The LOOP port (which I've blogged about before) is the largest oil port in the United States, offloading millions of barrels of oil each week from OPEC countries. Should the port close, the oil could be diverted to other ports, or may just have to wait to be delivered. This would put a crimp on oil supply, which could likely be offset by the higher supply of oil at the nation's largest commercial oil storage facility in Cushing, Oklahoma.

The Strategic Petroleum Reserve, which I've also blogged about, also has 726.6 million barrels of oil which could cover most, if not all, of the loss should the oil port need to close. The situation is hardly dire, there is clearly enough oil to offset any temporary closure.

However, even saying this, the closure would be psychologically important to traders and would likely oil prices to rise somewhat which could impact gasoline prices. I forecast if the worst case would happen, gasoline prices may... I stress may... increase 15-30 cents per gallon. Fundamentals, as rosy as they are, have not been focused upon, so I can't expect higher than average supply to downplay a closure of the LOOP.

For now, I believe that the U.S. average will be near but may not exceed $3/gallon over the Memorial Day weekend. I'm not really concerned about it, but thought it would be prudent to let you know that what is happening. Now, get back to concentrating on your Memorial Day plans!