Retail US gasoline prices surge as refineries warn of shortages after Harvey
NEW YORK: Retail US gasoline prices rose 2.8 percent from Friday to Saturday as refineries warned customers about fuel-supply shortages caused by Hurricane Harvey.
They were at $2.59 a gallon, according to motorists advocacy group AAA. It represents a 16.7 percent rise in the average price from a year ago.
Prices have risen more than 17.5 cents since Aug. 23, before the storm began.
Average prices in Texas, the epicenter of the storm, rose more than 3 percent from Friday to Saturday, and are up 12 percent from a week ago.
Harvey shut refineries that can process up to 4.4 million barrels per day (bpd) of crude. The plants shut down include Motiva’s 603,000 bpd facility in Port Arthur, Texas, the largest refinery in the country.
Nearly half of the U.S. refining capacity is in the Gulf Coast, a region with proximity to plentiful crude supplies including Texan oil fields and also Mexican and Venezuelan oil imports.
“The refineries were built on the Gulf Coast with the idea that we’re going to import,“ said Sandy Fielden, director of oil and products research at Morningstar in Austin, Texas, ”That’s why we’re having problems today because that’s where they were all built.”
The reduction in fuel supplies has forced the Colonial Pipeline, which supplies fuel from refineries near the Gulf of Mexico to the U.S. Northeast, to reduce supplies.
Convenience store and gas station chain Circle K, a big buyer from Motiva, said the company was working with a limited supply.
Some crude oil pipelines have restarted operations. Magellan Midstream Partners announced late Friday that it resumed operations on its BridgeTex and Longhorn crude oil pipelines. The two pipelines transport around 675,000 barrels per day (bpd) of West Texas crude oil into East Houston.
The company says it expects to resume service on its Houston crude oil distribution system over the weekend.
U.S. crude production continues to stall following the storm. As of Friday, volume of crude production still shut-in had declined to about 153,000 bpd, down from 324,000 bpd just two days ago.