Gasoline Price Surge Higher in Wake of Harvey

Gasoline Price Surge Higher in Wake of Harvey

And although USA oil stocks are at a high level, Williams cautioned that "there may be some short-term shortages of gasoline and diesel".

The price took some by surprise, like Arasely Campos, who said it was not right to hike up gas prices at the same time thousands of people are trying to flee the flooding from the hurricane. That includes Motiva Enterprises, the nation's biggest refinery, which announced Wednesday it would begin a "controlled shutdown."

"Refineries outside the affected area may delay maintenance to benefit from high processing margins", said Commerzbank oil analyst Carsten Fritsch, adding, "Hence, the negative impact on crude oil demand and oil product supply might be less severe than feared".

The largest oil refinery in the country is shutting down as Hurricane Harvey causes more catastrophic flooding.

If North Dakota starts to fill the impact, he said, oil companies would look for alternate marketing strategies, such as shipping by rail to different hubs.

Another key: the shale oil boom has encouraged US refiners, many of which are along the Gulf Coast, to produce more and more gasoline.

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Over the last eight days, gasoline prices have risen eight cents, and according to GasBuddy.com, national prices could rise by another five to 15 cents per gallon over the next two weeks.

Monster storm Harvey slammed into a key US oil-producing region disrupting output amid the devastation, but crude stocks are high enough that the impact on the industry should be short-lived, experts said Monday.

Port Houston and the Port of Galveston said they would reopen today, the newspaper reported. A second sale of 10 million barrels is expected before October. If gasoline prices continue to soar, "crude prices will be dragged higher".

Several pipelines were also closed, potentially stranding crude in Texas that is destined for refineries elsewhere and interrupting gasoline supplies to other parts of the country. Goldman Sachs estimates that the storm has left the market short of about 1.1 million barrels per day of gasoline.

Energy information provider S&P Global Platts said in a report Wednesday that roughly 2.33 million barrels per day of Texas's refining capacity was still shut down. Worse, refined product output in Latin America has fallen recently, with Mexico and Venezuela most vulnerable to supply outages in Texas.

The storm is set to keep dumping torrential rain on the state for days, potentially delaying refinery restarts. It also makes it harder for marginal producers, such as many US shale drillers, to effectively hedge future output, which may result in lower spending on exploration and developing new wells.

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