Fuel prices were expected to keep rising as refining capacity remains down and pipelines run short.
All of this means there is a lot less supply of gasoline, leading to higher gas prices.
U.S. GDP Growth Revised Up to 3%.
That’s down 14.5% from record levels reached in March.
The crude released to the Phillips 66 refinery will take the form of an exchange, in which the Houston-based company will replace the oil once supplies are flowing again.
Traders have hired vessels to ferry at least 105,000 tons of processed products from Singapore to America next month, and are seeking to charter more.
AMSTERDAM-U.S. crude oil prices are on track to post the steepest monthly losses in more than a year on August 31 as concerns spread over falling demand in the world’s top oil-consuming country after storm Harvey knocked out nearly a quarter of its refineries. Congress created it in 1975 amid fears the Arab oil embargo could cause long-term spikes in motor fuel prices that harmed the US economy.
Officials said the refinery, which hasn’t been shutdown by the historic flooding, requested the release of emergency oil.
This crude will now either have to be put in storage, or find other buyers. “This will have a double-impact on refinery margins, especially in Asia”.
Oil prices should face further pressure in the coming weeks because US crude stocks are likely increase, according to analysts at Commerzbank. The margin was less than US$6.50 on Monday. Global benchmark Brent crude futures were down 0.14 per cent to $50.79 per barrel while West Texas Intermediate (WTI) futures, the United States benchmark, fell 0.11 per cent to $45.91 per barrel. That is 10 cents above where it was just before Harvey hit the Gulf Coast, according to AAA.
Goldman Sachs said in a research note that an estimated 3 million barrels per day of refining capacity was offline, as of Monday. A combined 23 per cent of American capacity is at least partially offline.
According to the New York Times, Kentucky has the 3rd highest national average gas price of $2.42 – beat out only by West Virginia’s $2.47 and Michigan’s $2.59. U.S. petrol futures were particularly rattled by Wednesday night’s announcement by Colonial Pipeline that it was shutting down the key artery carrying fuel from the Gulf coast refining hub to the East Coast, in a move that could drastically restrict petrol and diesel flows to some of the biggest cities in the US.
“At this point, we’re really waiting to see what the cumulative effect will be” from Harvey, said Paul Hesse of the U.S. Energy Information Administration.
Average U.S. retail fuel prices have surged by more than a dime per gallon from a week ago, the AAA said early on Thursday.
Prices were spiking in Southern Ohio and Northern Kentucky to $2.55 – $2.59 a gallon Thursday, Aug. 31.
As of the close on Wednesday, WTI was at $45.96 a barrel, some $4.90 below Brent, a far bigger discount than the $2.62 that prevailed at the start of August.
Motiva Enterprises began shutting down its 603,000-bpd Port Arthur, Texas, refinery, the nation’s largest, on Tuesday evening because of flooding within the plant, said sources familiar with plant operations.
But also of importance is the idling of both offshore and onshore oil production in the region, with more than 320,000 bpd of offshore output remaining idled as of Wednesday.