Economy

Gas prices expected to increase in wake of Harvey

Gas prices expected to increase in wake of Harvey”

"In addition to that, we traditionally see gas prices increase at the end of August going into Labor Day, as it's the last big weekend of the summer".

Tom Kloza is with Oil Price Information Service.

According to the AAA, the average national price of a gallon of regular unleaded gasoline was $2.519 early on Friday, the highest of 2017.

A gallon of gas will cost an average of $2.85 in OR as of Friday, according to AAA. The Georgia-based company remains able to operate its pipeline from Louisiana to states east and northeast of there, though deliveries will be "intermittent", the company said.

Motiva's massive Port Arthur refinery, the largest in the USA, shut down on Wednesday due to "increasing local flood conditions".

More than 30 percent of the USA gasoline refinery capacity is shut down because of Harvey.

Patrick DeHaan, an analyst for GasBuddy, predicts that US gasoline prices will top out around $2.50 or $2.55 a gallon, an increase of up to 20 cents since Harvey hit, with bigger spikes closer to the Gulf.

In Texas, where Harvey caused massive flooding, the price per gallon was $2.26 which is 12 cents higher when the hurricane threatened Texas last week.

Analysts are cautioning drivers not to panic as some gas stations run low on gasoline. Gas expert Morris Burns says when everyone goes to the pump many of those same stations weren't ready for the high volume of drivers.

While retail prices are rising, motorists may see additional increases at the pump in some areas.

On Wednesday, officials with the Department of Energy reported that 10 Gulf Coast refineries remained shut down. As of Thursday night, most stations in the region, however, were charging about $2.65 a gallon.

"AAA does not expect Gulf refineries to be offline for months", he said.

McTeague says with supply down, "there are very few refineries that make enough gasoline to supply markets south of the border".

Meanwhile, the head of the Texas agency that regulates the oil and gas industry is urging people to wait three or four days to fill their cars and trucks with gasoline if they can.

"The impact could linger for several weeks or longer, depending on how long it takes Texas refiners to return to normal operations", DeHaan said.



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