Gas prices on the rise for Labor Day weekend travel

Posted September 01, 2017

In the following days, as the storm caused widespread flooding, more inland refineries stopped operations.

When Hurricane Harvey made landfall last Friday, it dumped the largest amount of rain recorded for a single storm in the continental United States, devastating homes and businesses along the Texas coast. Prices at the pump haven't budged much - yet.

Average U.S. retail fuel prices have surged by more than a dime per gallon from a week ago, the American Automobile Association (AAA) said early on Thursday, reaching $2.449 per gallon nationwide.

Gas price spikes after hurricanes tend to be fleeting.

The Colonial Pipeline runs to NY and provides almost 40 percent of the South's gasoline.

Other major storms took place before the US oil boom, when inventory was much lower.

As long as production isn't stalled long-term from the hurricane, Stickel said it's not likely that oil prices are going to jump significantly.

The Department of Energy hopes the release of 500,000 barrels of reserve crude will offset the fuel shortage and stabilize prices.

Seven refineries along the Texas Gulf Coast have closed, and 11 more in Texas and Louisiana are at risk of closing, according to data compiled by Morningstar.

The eventual impact to gas prices is likely to be limited by the USA shale oil boom. The impact of the storm overshadowed the latest weekly figures on United States oil supplies from the American Petroleum Institute.

Several refineries in the USA remain closed, with demand for crude oil dropping significantly in the country.

Additionally, Alaska's oil doesn't compete with Gulf Coast oil.

Driven by shale, the US pumped 9.2 million barrels of oil per day in May. Industry analysts estimate that as much as 12 percent of the nation's refining capacity was offline. The largest refinery in the USA was shutting because of flooding, sources familiar with operations said. At least one, ExxonMobil's huge Baytown facility, has suffered damage. In addition to the key ports in Houston and Corpus Christi, ports in Lake Charles, Beaumont and Port Arthur are also down.

The analyst added that despite strong supply levels, the oil price should move higher.

Benchmark European gasoline refining margins, which measure the profit of converting crude oil into the road fuel, rose to around $21 a barrel on Thursday, a two-year high.

As of Thursday, some 15 refineries representing about 25 percent of US refining capacity were offline from Corpus Christi, Texas, to Port Arthur, Texas, the Energy Department reported.

However, the extreme flooding could prevent some refinery workers from being able to return to work.