Gasoline prices continued to climb nationwide Wednesday, as Hurricane Harvey forced more refineries to shut down and put a critical pipeline in jeopardy.
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Harvey, now a tropical storm impacting parts of Texas and Louisiana, has brought massive flooding to Houston and neighboring cities. Officials say at least 18 people have died and 13,000 have been rescued since the storm arrived Friday. The slow-moving hurricane likely caused $51 billion to $75 billion in total damage to homes, vehicles, businesses, infrastructure and economic activity, according to Moody’s Analytics.
Harvey has wreaked havoc on U.S. energy infrastructure along the Texas Gulf Coast, which is home to about 30 refineries that produce gasoline, diesel and other fuels. The latest shoe to drop was Motiva’s refinery in Port Arthur, Texas, the largest refinery in the country. The Saudi-owned company temporarily closed the facility Wednesday morning after initially reducing capacity due to local flood conditions. S&P Global Platts estimated that refineries had shut down or cut 18.1% of the nation’s capacity by late Tuesday.
With supplies under pressure, gasoline futures are trading at more than two-year highs. New York Harbor gasoline gained another 12.5 cents, or 7%, to $1.90 a gallon.
“What does that mean for the average driver? It means hang onto your wallet,” said Phil Flynn, Price Futures Group senior market analyst and FOX Business Network contributor, during an interview on “Mornings with Maria.”
With supplies under pressure, the national average is already up nearly 8 cents a gallon over the past week, according to GasBuddy’s live ticking average. Gas prices averaged about $2.42 a gallon Wednesday morning, 2 cents more compared to the prior day.
Analysts are keeping a close eye on the status of the Colonial pipeline, which transports more fuel than any other pipeline in the U.S. A shutdown of Colonial’s pipeline is the “nightmare scenario,” Flynn said. But Colonial said Tuesday its pipeline continued to operate, though at reduced capacity due to limited supply from the Houston area and storm-related damage to three facilities.
“Personnel have been deployed to the region to assist in bringing our system back to full capacity as soon as conditions on the ground are deemed safe,” Colonial said.
Flynn noted that if Colonial ultimately needs to shut down its pipeline, it has the potential to create shortages across the East Coast. The Colonial system runs from Houston to Linden, New Jersey, serving markets in the southeast and mid-Atlantic.