The United
States of America has been hit by gasoline shortages as the effect of
tropical storm Harvey and the flood it brought to Texas and environs
disrupted production on the Gulf Coast.
Retail US gasoline prices rose 2.8 per
cent from Friday to Saturday as refineries warned customers about the
fuel-supply shortage.
They were at $2.59 a gallon, according to
motorists’ advocacy group, AAA, representing a 16.7 per cent rise in
the average price from a year ago. Prices have risen more than 17.5
cents since August 23, before the storm began.
Average prices in Texas, the epicenter of
the storm, rose more than 3 per cent from Friday to Saturday, and are
up 12 per cent from a week ago.
Refiner, Motiva, warned customers along
the route of the largest US fuel pipeline to prepare for shortages after
Harvey shut refineries and cut supply to the line, said a source at a
fuel distributor supplied by Motiva.
Harvey shut refineries that can process
up to 4.4 million barrels per day (bpd) of crude. The plants shut down
include Motiva’s 603,000bpd facility in Port Arthur, Texas, the largest
refinery in the country.
Nearly half of the US refining capacity
is in the Gulf Coast, a region with proximity to plentiful crude
supplies including Texan oil fields and also Mexican and Venezuelan oil
imports.
“The refineries were built on the Gulf
Coast with the idea that we’re going to import,” said Sandy Fielden,
Director of Oil and Products Research at Morningstar in Austin, Texas.
That’s why we’re having problems today because that’s where they were
all built.”
The reduction in fuel supplies has forced
the Colonial Pipeline, which supplies fuel from refineries near the
Gulf of Mexico to the US Northeast, to reduce supplies.
Convenience store and gas station chain, Circle K, a big buyer from Motiva, said the company was working with a limited supply.
Some crude oil pipelines have restarted
operations. Magellan Midstream Partners announced late Friday that it
resumed operations on its BridgeTex and Longhorn crude oil pipelines.
The two pipelines transport around 675,000bpd of West Texas crude oil
into East Houston
The company says it expects to resume service on its Houston crude oil distribution system over the weekend.
US crude production continues to stall
following the storm. As of Friday, volume of crude production still
shut-in had declined to about 153,000bpd, down from 324,000bpd just two
days ago.
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