Gasoline hit a two-year high Tuesday, Aug. 29 as the flooding from Hurricane Harvey along the Texas Gulf Coast has shut down some of the country’s biggest oil refineries.
Gasoline hit a two-year high Tuesday, Aug. 29 as the flooding from Hurricane Harvey along the Texas Gulf Coast has shut down some of the country’s biggest oil refineries.
One of those refineries forced to shut down Wednesday due to the storm was Motiva’s in Port Arthur, which is the country’s largest. The refinery, located near the Texas-Louisiana border and 80 some miles east of Houston, produces 603,000 barrels-per-day.
With the Motiva shutdown, Reuters reports that 19.6 percent of the country’s refining capabilities have been closed due to Harvey. As a result of this, Bloomberg reports gasoline hit a two-year high as it rose to $1.8422 per gallon on the New York Mercantile Exchange. This represents a bump of 5.89 cents.
« Harvey’s disruptions mean greater variability in the weekly U. S. oil inventory, production and demand data in the next weeks, which will likely add to higher volatility, » Giovanni Staunovo, an analyst based in Zurich, told Bloomberg .
CNN reports that with Motiva closing until the flooding tampers off, there are now at least 12 oil refineries inactive.
Texas Attorney General Ken Paxton told CNBC that they have received more than 500 complaints of price gouging over the weekend and during the storm. He told the outlet that this included reports of people charging $99 for a case of water, hotels marking their prices up aggressively and gas going for between $4 and $20 per gallon in some instances.
Hurricane Harvey hit the Texas coastline as a Category 4 hurricane Saturday morning, and there have been three confirmed deaths. The storm hit land again Wednesday when it crashed into southwest Louisiana as a tropical storm.
The National Weather Service says nearly 50 inches of rain had fallen as of Tuesday morning. The previous Texas record for rainfall was 48 inches, which was set back in 1978 in Medina.
Across the nation, the average cost for a gallon of unleaded gasoline is about $2.36 as of 3: 42 a.m. Monday morning.
Harvey is most expected to impact crude imports in the Gulf Coast and could also hamper imports to Mexico, and tanker from Florida may be prevented from crossing the Gulf of Mexico.
« A hurricane like this typically causes an increase in fuel purchases in the market and a slowdown in retail demand, » Jeanette Casselano, AAA spokesperson, said in a news release.
« Spikes in pump prices due to the effects of hurricanes tend to be brief but dramatic. This impact is starting in Texas, where the average price for unleaded gas has already jumped up two cents since Tuesday (Aug. 22) to $2.15/gallon. »
