How Hurricane Harvey will impact prices at the gas pump

The Washington Post | Steven Mufson | August 27, 2017

Hurricane Harvey has barreled into the heart of the U.S. oil and gas industry, prompting the sudden evacuation of workers. Spot prices for gasoline are expected to jump Monday, but the full extent of damage will not be clear for days, companies and experts said.

Oil and gas companies have shut down about a quarter of oil and gas production in the Gulf of Mexico, according to a U.S. Bureau of Safety and Environmental Enforcement survey Saturday. That would be about 5 percent of nationwide output.

Companies have also been shutting down much of their refinery operations onshore, idling about 10 percent or more of the nation’s refinery capacity. That might not only raise prices and create temporary shortages in the Gulf Coast area but could also boost prices in places as far away as the Northeast, where a portion of gasoline supplies are delivered by pipeline from the Gulf.

S&P Global Platts estimated Saturday that about 900,000 barrels a day of refinery capacity had been closed, about 5 percent of nationwide capacity.

More plants closed Sunday, including two of the country’s biggest — Shell’s Deer Park and ExxonMobil’s Baytown, with about a million barrels a day of capacity between them.

Initially, companies were closing facilities in Corpus Christi, but the latest closings were on the Houston ship channel.

How long the shutdowns will last wasn’t clear Sunday.

Craig Pirrong, professor of finance and director of the Global Energy Management Institute at Bauer College of Business at the University of Houston, said in an email that it was “too early to tell re oil and gas. Gulf operations shut down, and they won’t be able to assess until they go back. Refineries should be OK as long as they have power.”

He said that “with most people and companies hunkered down, it’s hard to get a comprehensive picture.”

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