Economy

Gas prices increase, officials say there is no shortage

Gas prices increase, officials say there is no shortage”

The national average for regular was $2.56 a gallon by late Friday afternoon, an increase of 20 cents in the last week, according to GasBuddy. But there will likely be continued pain at the pump as the numerous refineries along the Texas Gulf Coast struggle to get back online.

As of Thursday afternoon, 10 refineries representing 16.6 percent of daily US refining capacity were shut down, according to the Department of Energy. Motiva's massive Port Arthur refinery, the largest in the US, shut down on Wednesday due to "increasing local flood conditions", while Valero also closed its Port Arthur refinery on Wednesday. The reserve now holds 679 million barrels of oil, which is reportedly enough to meet USA demand for 33 days. That was the case after Hurricane Katrina in 2005, which shuttered major USA oil producers and refiners.

Colonial Pipeline said Thursday it was temporarily suspending lines that originate in Houston and feed the East Coast. Officials said the refinery, which hasn't been shutdown by the historic flooding, requested the release of emergency oil.

The US Strategic Petroleum Reserve (SPR), a series of underground caverns in Louisiana and Texas operated by the Department of Energy, holds 678.9 million barrels of crude, enough to meet total US needs for 33 days. The company will have to replace the crude later.

At a Friday news conference, Texas Gov. Greg Abbott sought to calm fears about fuel shortages.

Texas Railroad Commissioner Ryan Sitton said today that despite decreased oil production, there is no gas shortage. "Don't worry. We will not run out".

"At least 20 tankers were booked to load European fuels for the USA since Harvey made landfall, a rate almost double the average for August, shipping data compiled by Bloomberg show".

High shipping costs and uncertainty over the impact of Harvey on trade flows meant traders were still reluctant to lock in the cargoes, several traders said.

The U.S. Gulf Coast refining hub has in recent years become a major supplier of fuels such as gasoline and diesel to overseas markets such as Brazil, Mexico and Europe.

Still, conditions are returning to normal around the Port of Corpus Christi, where flooding was minimal.

Half the 26 refineries that connect to Colonial's pipeline system are between storm-ravaged Houston and Lake Charles, Louisiana, which is just east of the Beaumont-Port Arthur area.



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