Week of severe winter weather will give boost to crude prices
Area price of gas soars, expected to continue rising after power crisis
The price of gasoline, held unusually low by sinking demand during the pandemic, is expected to steadily rise for several months after last week’s deadly power crisis curtailed production.
In Houston, the average price of gasoline soared last week by 12 cents to $2.25 a gallon, the highest price in more than a year according to fuel-tracking website GasBuddy. Area motorists now pay 18 cents more than they did in January and 14 cents more than they did a year ago, just before the pandemic began to sweep the nation.
Nationally, the price of gas jumped by 10 cents to an average $2.63, GasBuddy analyst Patrick DeHaan said. It was the largest weekly hike since Hurricane Harvey’s historic rainfall forced the region’s refineries to shut down in August 2017. This year, it was a historic winter storm that brought the industry to a halt after the state’s power grid nearly collapsed, leaving much of the state in the dark. The storm, with brutally cold temperatures, is linked to more than 48 deaths.
Refineries on Texas’ Gulf Coast, some of the largest in the nation, were brought down by rolling electric blackouts as the Electric Reliability Council of Texas, which manages the state’s selfof
contained power grid, became overwhelmed by demand and a loss of power generation.
Motiva shut down its Port Arthur refinery, the nation’s largest with a capacity of 600,000 barrels a day, and Exxon Mobil was forced to halt its Baytown operations with a capacity of 560,500 barrels a day, according to Argus Media, an energy information provider. Others, including Lyondell-Basell in Houston, Citgo in Corpus Christi and the Deer Park refinery run by Total, Valero and Shell, also halted some operations.
“About 20 percent of all oil refining capacity was down for a good portion of last week,” DeHaan said.
Gasoline prices were already on the rise in recent weeks, spurred by a rally in crude that continued Monday. West Texas Intermediate, the nation’s benchmark, rose $2.25 Monday to settle at $61.49.
Motorists aren’t likely to get a break as the U.S. prepares to enter the summer driving season, DeHaan said.
In March, refiners will begin to switch to a cleaner, summer blend of gasoline. The fuel, which reduces emissions during warmer weather, costs refineries several cents more per gallon to produce. That price hike is on top of typical summer price increases caused by growing demand as more Americans take to the roads — a tradition that gets a boost this year if vaccines help ease the pandemic.