First State still feeling Harvey's impact on gas prices

First State still feeling Harvey's impact on gas prices

First State still feeling Harvey's impact on gas prices

Wednesday, the USA central bank said Harvey caused "broad disruptions to economic activity" along the Gulf Coast, including closed refineries, flooded workplaces, and disrupted transportation of goods and people. Now, depending on the track of Hurricane Irma, this could potentially send prices soaring or crashing on gas, depending on where she makes land fall.

The group expects prices to go up another dime or more per gallon before the situation stabilizes later in September, said Jeanette Casselano, AAA spokeswoman. One track has the storm hitting Florida straight up the middle of the state which would be bearish for prices as we would see demand destruction at a historic level.

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished mixed on Monday.

"Prices are extending the momentum seen in the last few days due to a number of US refineries restarting after Harvey", said Harry Tchilinguirian, Head of Commodity Markets Strategy at BNP Paribas.

In response to refineries and pipeline shutdowns, last week the DOE authorized the Strategic Petroleum Reserve (SPR) to negotiate and execute emergency exchange agreements authorizing 5.6 million barrels of crude oil to be released.

Will gas prices in the Gulf states continue to rise?

As is usually the situation, gas prices are the least expensive in states near the refineries on the Gulf of Mexico.

In the Philly area, a gallon of regular is averaging $2.86, up 32 cents in the past week.

"Traders are hopeful that crude backlogs will be cleared", said Jeffrey Halley, senior market analyst at futures brokerage OANDA. For nearly two weeks, gasoline prices have experienced upward pressure due to the hurricane's effects on oil production and refinery output.

Valero's 275,000 b/d Corpus Christi and 220,000 b/d Texas City refineries had returned to pre-hurricane rates, but the U.S. independent refiner's 95,000 b/d Three Rivers refinery, one of the first to report restart work, continued to work toward normal operations. "U we also are keeping an eye on Irma, the next storm as its moving its way across the Atlantic". Trends will depend on what happens with Hurricane Irma. This compares with 4.2 million bpd at the height of the storm. In contrast, gasoline spot prices remained stable or fell in the days after Hurricane Sandy, which hit the U.S. East Coast, and Hurricane Ike made landfall. In addition, DOE and the Environmental Protection Agency (EPA) have issued waivers to Colonial to accept more product into its pipeline.

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