Even before checking the Internet this morning, I could tell gas prices were stabilizing. Gas had risen to $3.25 a gallon, in Madison, last Thursday. Monday morning, most gas stations in the area had lowered prices to $3.19 a gallon. This morning, I found a partial explanation, courtesy of the New York Times:

Gasoline supplies will likely remain tight through much of the coming week if not longer, industry officials and analysts said, as refiners slowly resume operations in the gulf region. It can take several days to restart those facilities, because of the danger of explosions and other accidents. Of the 10 refineries that were shut down by the storm initially, eight have not resumed operations, two are restarting and hope to be operational in the coming days, and three still do not have electricity, the Energy Department said on Sunday. At least four refiners that produce about 5 percent of the nation’s gasoline and other oil-based fuels have sustained significant damage and could be out of commission for a month or more for repairs, officials and analysts said. Among them are ConocoPhillips’ Belle Chase, La. facility; Exxon Mobil’s Chalmette, La. plant; and ChevronTexaco’s large refinery in Pascagoula, Miss.

[...]

Of the two major pipelines that bring gasoline, diesel fuel and jet fuel to the eastern half of the United States from Texas and the gulf, the smaller one, the Plantation pipeline, said it was operating at 100 percent. The other, the Colonial pipeline, was at 73 percent as of Saturday and hoped to be at full capacity by the end of the holiday weekend.

Also, the federal government and members of the International Energy Agency, a 26-nation organization created after the 1970′s oil crisis, have started releasing crude oil and some gasoline to energy companies in an effort to ease supply constraints. Those moves helped push down crude oil prices 2.1 percent in London tradingtoday. The New York Mercantile Exchange was closed for the Labor Day holiday. The United States Department of Energy has already agreed to loan 12.6 million barrels of oil to refiners so they can keep producing gasoline and other fuels as production facilities in the gulf recover. This weekend, the government went even further and said it would sell 30 million barrels or more of oil in addition to the loans, which companies have to replace when conditions improve.

The oil refineries are starting to come back online. Once they do, I expect the price of gasoline to drop even further. This helpful chart from the BBC details the refineries’ status (hat tip to PoliBlog:

Finally, after reading in the New York Times that one Atlanta gas station owner had raised prices to $5.89 a gallon, many people assumed that prices were that high all throughout Atlanta. Not true. In fact, most places in Atlanta were selling gas for as little as $2.89 a gallon. Now that’s a price point I’d sure like to return to. Soon, hopefully.

Note that all of this action: prices rising, prices falling, and supplies being conserved is happening without government action. The economy is capable of running itself as long as free markets are left free.