Harvey drives up gas prices nationwide

(August 29, 2017) As Hurricane Harvey blasted Texas, gas prices shot up across the country. At $2.37, today’s national gas price average is four cents more expensive on the week and one of the largest one-week national gas prices surge seen this summer, according to statistics prepared by AAA.

About one quarter of oil refining capacity in the Gulf Coast had been taken offline, according to forecasts by Oil Price Information Service (OPIS).

That equates to about 2.5 million barrels of oil daily. Harvey also caused eight refineries in Texas to shutdown, including: ExxonMobil Baytown (584,000 b/d), Deer Park (340,000 b/d), Pasadena Refining (115,700 b/d) and Phillips 66 Sweeny (260,000 b/d) in the Houston region, while several others are operating at reduced rates.

In Corpus Christi, Flint Hills (304,000 b/d); Valero (300,000 b/d); CITGO (163,500 b/d) and Valero Three Rivers (91,000 b/d) remain offline since initial shutdowns began in advance of Harvey late last week. Over the weekend, Valero reported its refineries in Corpus Christi and Three Rivers sustained “substantial refinery impacts” and the company is evaluating infrastructure needs to determine when the refineries can resume operations. Corpus Christi is connected via pipeline to refineries in San Antonio and Nixon, Texas, which can supply Corpus Christi if local refiners are offline for an extended period.

“No doubt, Harvey has impacted operations and access to refineries in the Gulf Coast.  However a clear understanding of overall damage at the refineries is unknown,” said Jeanette Casselano, AAA spokesperson. “Despite the country’s overall oil and gasoline inventories being at or above 5-year highs, until there is clear picture of damage and an idea when refineries can return to full operational status, gas prices will continue to increase.”

On Sunday, Magellan Midstream Partners suspended all inbound and outbound refined products and crude oil transportation services on its pipeline systems in the Houston area. Conversely, the Colonial Pipeline said its Gulf Coast pipeline and terminals are continuing to operate normally. The Colonial Pipeline delivers gasoline from Houston to the Mid-Atlantic.

Harvey is expected to continue to impact the region through the middle of the week with an additional 15 – 25 inches of rain expected over the middle and upper Texas coast through Friday.

To help alleviate the tight and potential shortage of supply, the Environmental Protection Agency (EPA) announced over the weekend that it will waive environmental standards on gasoline for select counties in Texas.

“As in any national or local state of emergency, AAA expects gas prices to be held in check up and down the gasoline supply chain, including prices set by refiners, distributors and dealers unless there is a clearly justifiable reason for an increase,” added Casselano.

Quick Stats

    The nation’s largest weekly changes are: Indiana (+11 cents), Ohio (+9 cents), Florida (+7 cents), Michigan (+7 cents), Illinois (+6 cents), Washington (+6 cents), Georgia (+5 cents), South Carolina (+5 cents), Washington, D.C. (+4 cents) and Texas (+4 cents).

    The nation’s top 10 least expensive markets are: South Carolina ($2.11), Alabama ($2.12), Arkansas ($2.12), Mississippi ($2.12), Oklahoma ($2.13), Missouri ($2.14), Virginia ($2.15), Louisiana ($2.16), Tennessee ($2.16) and Texas ($2.17).