Hurricane Harvey caused U.S. Gulf Coast refinery runs to drop, gasoline prices to rise

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Hurricane Harvey caused estimable disruptions to wanton oil and petroleum product supply bondage and increasing petroleum product prices. For a week finale Sep 1, 2017, sum inputs to refineries in a U.S. Gulf Coast fell by 3.2 million b/d, or 34%, from a prior week, a largest dump given Hurricanes Gustav and Ike in 2008. Weekly refinery function in a segment fell from 96% to 63%, while other areas of a nation remained probably unchanged.

Image credit: U.S. Energy Information Administration

Just over half of all U.S. refinery ability is located in a U.S. Gulf Coast (defined as Petroleum Administration for Defense District 3). Texas, where Harvey done landfall, represents 31% of all U.S. refinery capacity, formed on data from Jan 2017. These refineries supply petroleum products to domestic markets on a Gulf Coast, East Coast, and Midwest, as good as to general markets.

The Gulf Coast segment is also a pivotal storage area for wanton oil and petroleum products. As of Mar 2017, 49% of sum U.S. operative wanton oil storage ability and some-more than 40% of operative storage ability for both engine gasoline and diesel fuel were located in a Gulf Coast region.

Refinery operations are mostly contingent on a supply of wanton oil and feedstocks, electricity, protected operative conditions, workforce availability, and outlets for production. As a outcome of Hurricane Harvey, many refineries in a segment possibly reduced runs or close down in a aftermath.

Image credit: U.S. Energy Information Administration

Many wanton oil and petroleum product pipelines were also influenced by a hurricane, including a Colonial Pipeline system. Colonial connects 29 refineries and 267 placement terminals and carries adult to 2.5 million b/d of gasoline, diesel, and jet fuel from Houston to as distant north as New York Harbor. Colonial typically operates during or nearby full capacity, though as a outcome of Hurricane Harvey and a decreased supply of petroleum products accessible to ship, Colonial Pipeline quickly curtailed operations and shipped products intermittently before resuming operations during reduced rates of upsurge on Sep 6.

As reserve were disrupted, a East Coast drew down inventories of engine gasoline. East Coast sum engine gasoline inventories in a week finale Sep 1, 2017 fell by 2.2 million barrels, or 3.5%, compared with a prior week. Almost all of this drawdown occurred in a Lower Atlantic region, that stretches from Virginia to Florida. This weekly dump in inventories was smaller than a dump that occurred following a previous outage of a Colonial Pipeline in Sep 2016, when Lower Atlantic gasoline inventories fell by scarcely 6 million barrels.

Disruptions caused by a whirly also led to aloft gasoline prices. The U.S. normal unchanging sell gasoline cost increasing 28 cents per gallon (gal), from $2.40/gal on Aug 28, 2017 to $2.68/gal on Sep 4, formed on weekly information collected in EIA’s Gasoline and Diesel Fuel Update.

In a areas influenced by a hurricane, gasoline prices rose even more, though they still remained next a inhabitant average. Gulf Coast gasoline prices rose by 35 cents per gallon to $2.51/gal, Texas state normal prices rose 40 cents per gallon to $2.56/gal, and Houston prices rose by 35 cents per gallon to $2.43/gal from Aug 28 to Sep 4. In any box (United States, Gulf Coast, Texas, and Houston), these were a largest weekly increases in gasoline prices given Hurricane Katrina in 2005.

Source: EIA

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