Hurricane Harvey, Labor Day demand create jump in gas prices

Hurricane Harvey, Labor Day demand create jump in gas prices

Gas prices spiked overnight and are up about 17 cents a gallon since Hurricane Harvey struck Texas. DeHaan and Tom Kloza of the Oil Price Information Service, now see the national average peaking as high as $2.75 a gallon in the next few days. OPEC shipments will drop by 80,000 barrels a day to September 16, according to tanker-tracker Oil Movements.

Fearing a gasoline supply squeeze, USA gasoline prices RBc1 rose to a more than 2-year high of $1.935 per gallon early on Thursday.

When it comes to gas hoarders, analyst Patrick DeHaan says "that's going to make the problem worse, and prices shoot higher and the event will last longer, with more disruption and shortages". "We expect the national average to top $2.50 per gallon". It expected to resume distribution from Houston on Sunday. Shipbrokers said cargo flows to NY are expected to be the highest since November, when an explosion on Colonial Pipeline cut off supplies.

Gas stations across the country, including in East Texas, should expect to see increased gas prices over the next several weeks following the destruction from Hurricane Harvey.

"The key issue is that because the refineries are offline, it does not mean they are damaged".

Now that Harvey has moved east, Valero Energy, Citgo Petroleum and Flint Hills Resources are preparing to restart refineries at Corpus Christi, according to regulatory filings and people familiar with the matter.

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The U.S. Energy Department announced Tuesday it will release half a million barrels of crude oil from the nation's Strategic Petroleum Reserve as Hurricane Harvey continued to wreak havoc on U.S. oil production and gas prices remained on the rise.

"Refineries outside the affected area may delay maintenance to benefit from high processing margins", said Commerzbank oil analyst Carsten Fritsch.

"The Department will continue to provide assistance as deemed necessary, and will continue to review incoming requests for SPR crude oil", the department said in a statement.

Colonial is not the only major fuel pipeline to shut down. Vessels are being loaded with gasoline in New York Harbor heading for Savannah, Ga.; and Jacksonville and Tampa in Florida, said Donald Morton, senior vice president of Herbert J. Sims & Co., who runs an energy trading desk. With its supplying refineries closed in the area, the pipeline operator cited reduced output as the reason for suspending its transportation operations.

Suppliers in Chicago were trying to secure supplies after the Explorer Pipeline, which typically carries about 350,000 barrels a day (bpd) to the region, shut down.