01 September, 2017
Gasoline rose to a two-year high as Tropical Storm Harvey hit the U.S. Gulf coast again, after already knocking out a fifth of the nation's refining capacity.
Meanwhile, the average US gasoline price increased by 5 cents during the week to $2.38 a gallon, GasBuddy reported. A Reuters survey estimates that ~3 MMbpd (million barrels per day) of refinery crude oil demand is offline, making up ~16% of the total USA refinery capacity.
The shutdown of about 2.2 million barrels, or 12 percent, of US refining capacity drove gasoline prices up as much as 6.8 percent since Friday.
AAA found regular selling for as low as $2.11 and as high as $2.39 per gallon.
Joswick said that it was still too early to be certain, but that many oil and gas industry operators had learned from Hurricane Katrina and moved some of their equipment higher up to guard against flooding.
After Hurricane Rita in 2005, processions of cars trailed tankers in Houston as they made deliveries to gas stations.
Inventories are expected to build in the coming weeks as refineries struggle to crank up operations and crude pumped from the ground seek outlets to be processed.
"One of our members today attempted to load a truck, spent 5.5 hours waiting only to discover the bulk plant had run out of fuel".
On a normal day, the average time spent at the truck rack is about an hour.
At least 10 refineries have been knocked offline by historic flooding in the Houston and Corpus Christi regions.
"We have the most gelatinous belly of crude oil that we've come into Labor Day with in a long, long time".
Other pipelines that haul fuel from the Gulf Coast including the 700,000 bpd Kinder Morgan Plantation pipeline and Enterprise Products Partners' TE Products system were functional.
In addition to shutting oil refineries, about 1.4 million bpd of USA crude production has been disrupted, equivalent to 15 percent of total output, Goldman Sachs said in a note.
Exxon Mobil referred Reuters to trade associations, saying this is an industry-wide issue.
David Gray, a spokesman for the Environmental Protection Agency, said the company reported that it released 15 pounds of benzene due to damage from the storm.
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.
Global growth and oil demand has been favorable for oil prices since the start of the second half of 2017, and the storm should only introduce a brief period of weakness, said Barnabas Gan, an economist at Oversea-Chinese Banking Corp.in Singapore.
