Flooding knocks out U.S. refineries, crude hit by supply disruptions

Posted September 02, 2017

Meanwhile, diesel prices are holding steady for now, EIA said, though they are much higher in comparison to the same period previous year.

The $2.44 price average Thursday was the highest recorded price for a gallon of unleaded gasoline so far in 2017, according to AAA. "We expect the national average to top $2.60 a gallon".

Kloza predicted that refinery shutdowns will lift per-gallon gas prices by 15 to 25 cents nationally, up from his earlier estimate of up to 20 cents.

That plant has not been hit by Harvey, which hammered Houston and the Gulf Coast with catastrophic flooding and shut about a quarter of USA refinery capacity.

Harvey crossed the Gulf Coast near the Texas-Louisiana border and has shuttered about 23% of USA refining capacity.

Closure of roughly a quarter of the USA refining industry sparked fears of fuel shortages before the Labor Day weekend and cast doubts on refinery demand for crude.

The spike in gasoline prices in the aftermath of Hurricane Harvey has hit the accelerator.

A major gasoline pipeline may be able to resume shipping fuel from the Houston area by Sunday, its operator said, potentially mitigating gasoline shortages across the southern United States since Hurricane Harvey forced Gulf Coast refineries to close. "Crude oil prices have declined while oil product prices have increased".

He said gas retailers usually have a buffer, which is why there was a delay in the jump of prices, but by Tuesday, there will be some significant increases.

West Texas Intermediate crude futures CLV7, -0.11% the USA benchmark, fell around 12% this week, while gasoline futures RBV7, -2.82% were up almost 4%, based on the most active contract. Colonial Pipeline officials also announced they expect to temporarily suspend the company's gasoline, diesel and jet fuel pipelines.

"Some of the refineries in Canada are going through fall maintenance, and that means we just don't have any capacity".

But although many of Texas' oil refineries and gas stations are flooded, officials there say that there is no sign of permanent damage.

The barrels were loaned to a refinery in Lake Charles, Louisiana, which has not been affected by now Tropical Storm Harvey.

One of the nation's largest convenience store chains plans to stop selling gasoline altogether at about half of its 135 stores in the Dallas-Fort Worth metro area, as it anticipates shortages due to refinery and pipeline shut-downs.