If you’re traveling over the Labor Day weekend, you might want to stop and fill up your gas tank before prices rise any higher.
Hurricane Harvey is the leading culprit of the price change. The storm barreled through the Gulf Coast and Texas, leaving damage and destruction in its wake. Some areas received over 50 inches of rainfall and harsh winds exceeding 130 mph.
According to Tom Kloza, chief oil analyst at Oil Price Information Service, “Hurricanes that land in Texas tend to have little impact on oil production, but more significant consequences for refining.”
A report released on Sunday by S&P Global Platts said, “Ten oil refinery plants run by Exxon, Citgo, Petrobras, Flint Hills, Magellan, Buckeye, Shell, Phillips 66 and Valero Energy in the Gulf Coast are shutting down because of the storm.” Oil market analysts projected about 13 to 16 percent of the country’s capacity to refine crude oil into gasoline, diesel and other fuels was offline Tuesday.
“Basically, this will affect everyone across the country on some level, and your proximity to the supply chain will affect how severe the impact is to you,” said Jeff Lenard, National Association of Convenience Store’s (NACS) vice president. NACS represents 80 percent of gasoline volume sold in the country.
The Colonial pipeline, which brings more than 3 million barrels of refined oil daily from the Gulf throughout the East Coast, released a statement announcing its partial closure. It will be non-operational West of Lake Charles, Louisiana and will only supply intermittent deliveries. The deliveries of fuel rely on refinery supply, and many supplying refineries are still experiencing closure from storm damage.
“You’re talking about a situation where a month from now gas prices will probably be lower, but a week from now they’ll be higher,” Kloza said to CNN.
Fill up now to avoid high prices but after the weekend, it may be unavoidable.
Story by Jade Manning. Photos by Jade Manning, BBC and Gas Buddies .
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