Hurricane Harvey Props Up Gasoline Prices

Gasoline prices have received a boost from the destruction caused by Hurricane Harvey. The main reason for the price spurt is that the destructive hurricane has forced many refineries to shut down. As per estimates, slightly over 18% of the total refinery capacity had been shut down by day break on Wednesday.  A key pipeline is at high risk as well. In combination, these factors have shored up gasoline prices quite significantly.

Texas Gulf Coast hit hard by hurricane

Over $50 billion of loss to property is expected to have taken place owing to the hurricane. The greatest intensity of damage is concentrated on the Texas Gulf Coast. This is the location where there are about 30 refineries and a prime source of gasoline apart from other fuels. Extensive flooding caused by Hurricane Harvey has rendered it impossible for the refineries to continue functioning as usual, forcing many to reduce output while others have shut down completely for the time being. The latest to opt for the temporary shutdown is the Port Arthur Motiva refinery. This refinery announced its shut down early on Wednesday after intense flooding made it impossible for it to carry on functioning.

Gasoline futures breach two-year highs

Thanks to the havoc caused by the hurricane and the refinery shut downs, gasoline futures have been seeing a spurt. Analysts say that since supply is under doubt, gasoline futures have moved up to cross the two-year high mark. This supply pressure has impacted the national average as well which is up by 8 cents per gallon and likely to move further upwards. Gas prices on Wednesday were higher than the previous day by 2 cents.

Colonial pipeline capacity reduced

Another key area of focus for commodity experts is the Colonial pipeline. This pipeline transports the major percentage of fuel in the U.S. and any disruption here can result in complete chaos for the fuel scenario in the country. The pipeline is operational as of now but its capacity has been reduced quite significantly mainly because supply has been severely restricted from the Houston location and also from other facilities that have been impaired by the hurricane. Work is going on at great speed to restore supply from all the key locations but the intense flooding is hampering recovery efforts substantially. If the Colonial pipeline does shut down even temporarily, the East Coast will suffer the major impact of the supply cut off.

Hurricane Harvey Props Up Gasoline Prices

Gasoline prices have received a boost from the destruction caused by Hurricane Harvey. The main reason for the price spurt is that the destructive hurricane has forced many refineries to shut down. As per estimates, slightly over 18% of the total refinery capacity had been shut down by day break on Wednesday.  A key pipeline is at high risk as well. In combination, these factors have shored up gasoline prices quite significantly.

Texas Gulf Coast hit hard by hurricane

Over $50 billion of loss to property is expected to have taken place owing to the hurricane. The greatest intensity of damage is concentrated on the Texas Gulf Coast. This is the location where there are about 30 refineries and a prime source of gasoline apart from other fuels. Extensive flooding caused by Hurricane Harvey has rendered it impossible for the refineries to continue functioning as usual, forcing many to reduce output while others have shut down completely for the time being. The latest to opt for the temporary shutdown is the Port Arthur Motiva refinery. This refinery announced its shut down early on Wednesday after intense flooding made it impossible for it to carry on functioning.

Gasoline futures breach two-year highs

Thanks to the havoc caused by the hurricane and the refinery shut downs, gasoline futures have been seeing a spurt. Analysts say that since supply is under doubt, gasoline futures have moved up to cross the two-year high mark. This supply pressure has impacted the national average as well which is up by 8 cents per gallon and likely to move further upwards. Gas prices on Wednesday were higher than the previous day by 2 cents.

Colonial pipeline capacity reduced

Another key area of focus for commodity experts is the Colonial pipeline. This pipeline transports the major percentage of fuel in the U.S. and any disruption here can result in complete chaos for the fuel scenario in the country. The pipeline is operational as of now but its capacity has been reduced quite significantly mainly because supply has been severely restricted from the Houston location and also from other facilities that have been impaired by the hurricane. Work is going on at great speed to restore supply from all the key locations but the intense flooding is hampering recovery efforts substantially. If the Colonial pipeline does shut down even temporarily, the East Coast will suffer the major impact of the supply cut off.

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