Hurricane pushes gas prices near 2-year high
But they are still far below all-time mark of $4.11 in July 2008
Gasoline prices are spiraling toward a two-year high with the Labor Day rush approaching after Hurricane Harvey ravaged the Texas Gulf Coast.
The storm brings what had been a summer of low gas prices to what could become a surprising end, far costlier than anyone expected earlier this month.
With 15 refineries closed as of Wednesday due to flooding, gasoline prices are rising. The national average hit $2.43 per gallon as of 2:15 p.m. Wednesday, up 7 cents from a week ago, according to consumer information site GasBuddy.com.
AAA pegged the average
“Beyond two weeks the increases should wind down, but you’ll still see gas prices affected by Harvey for at least a month.”
GasBuddy petroleum analyst
price at $2.40 on Wednesday morning. Prices could soon top the two-year high of $2.50 from August 2015, AAA’s Jeanette Casselano said.
“I think the biggest increases will be now over the next five days,” GasBuddy petroleum analyst Patrick DeHaan said. “Beyond two weeks the increases should wind down, but you’ll still see gas prices affected by Harvey for at least a month.”
Overall, the nationwide average is expected to peak with an increase of 15 cents to 25 cents, up from an initial outlook of 5 cents to 15 cents, DeHaan projected. It’s an unusual trend for gas, which typically kicks into reverse gear following the conclusion of the Labor Day driv-
Americans are paying about 19 cents more per gallon than a year ago, which equates to nearly $3 more per 15-gallon fill-up, according to AAA. But with prices still far below their all-time high mark of $4.11 per gallon set in July 2008, motorists probably won’t cancel late-summer road trips.
“I think they’ll stick to their plans,” Casselano said.
The latest catalyst driving prices higher was Wednesday’s announced closure of the Saudiowned Motiva oil refinery in Port Arthur, Texas, the largest refinery in the U.S. at 635,000 barrels per day, according to the Oil Price Information Service.
Other major refineries in the region, including Exxon Mobil’s plant in Baytown, have been crippled by similar conditions.
With Motiva down and other recent closures, about 25% of the nation’s gasoline refining capacity is offline, DeHaan said.
Several refineries in the Corpus Christi area are already making plans to reopen this week, according to IHS Markit analysts. Also, IHS reported that no refineries have reported long-term damage, likely limiting the lasting effect on gas prices. But with all four Houston ports closed, the flow of energy products in the region is at a near standstill until flood waters subside.