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Rising gasoline prices, other disruptions to ease as Texas refineries restart in slow process
The acceleration in gasoline prices in the aftermath Hurricane Harvey should ease as refineries in Texas restart production, but the process is slow.
About 4 million barrels per day of refining capacity was shut down — more than one-fifth of the nation's supply. Some of that supply is expected to return within a week.
Ten Texas refineries remained shut down Friday and another 10 were running at reduced rates or restarting, according to the Energy Department. It may be weeks before the country's largest refinery, Motiva's Port Arthur facility, restarts.
Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said the worst is over and refineries are "boiling just as much crude as we can" to boost supply.
"I think it's just going to start to get better as far as the crude coming in, being refined and being shipped to the racks, which obviously service all the gas stations," John said.
Gasoline prices have spiked since Harvey struck. In the last week, the average price jumped about 20 cents per gallon nationally and a similar amount in Baton Rouge, New Orleans and Lafayette, according to GasBuddy.com.
The nationwide average was already higher than most experts had given as a worst-case scenario when flooding from the devastating storm began knocking out refineries along the Texas Gulf Coast a week ago.
Two leading price-forecasting analysts, GasBuddy's Patrick DeHaan and Tom Kloza of the Oil Price Information Service, now see the national average potentially spiking another 20 cents a gallon higher in the next few days.
The analysts said interruptions in supply were isolated and lines in north Texas and elsewhere were largely the result of people rushing out to top off their tanks.
"There is enough gas out there," DeHaan said. "It's just a matter of getting it to the right places before motorists panic."
Long lines could pop up next in the Southeastern and Eastern states, as far north as New York, which get much of their gasoline from the Colonial Pipeline that taps into refineries in Texas and Louisiana. The operator doesn't expect the pipeline to resume normal operations until Sunday. On top of that, analysts said some gasoline from the Northeast is being diverted to Florida, and gasoline exports are contributing to the higher prices.