How panicked drivers are making North Texas gas shortages worse

Thirteen Gulf Coast refineries have been shut down or are in the process of shutting, while several others are operating at reduced rates, according to the most recent information from S&P Global Platts.

Oil prices are poised to climb over the coming weeks as supply and demand approach parity, according to analysts who spoke to CNBC as the remnants of Hurricane Harvey continues to ravage Houston, the energy capital of the United States.

“Cenovus and Husky, because they have Midwest refining assets – as does Suncor in Denver – they’ll probably see more of the strength in product prices than we’ll see in Ontario or Alberta (refineries)”. On Sunday, Harvey had impacted the refining of 2.2 million of barrels of oil a day.

Goldman Sachs estimated in its statement issued on Monday that the storm would increase domestic crude oil availability by about 1.4 million barrels a day if the case remained the same.

“Our Houston-area terminals now have inventory and are able to provide fuel supply to the stations in the region once the flooding clears, roads reopen and service stations are assessed”, a Chevron spokesman said in an email to Reuters.

Oil in NY declined nearly 6 percent last month as Harvey crimped crude processing and investors weigh rising American output against global supply cuts led by members of the Organization of Petroleum Exporting Countries.

The majority of North Texas gas stations are not expected to run out of gas, but costs are expected to rise.

The shale boom, which deployed new technology to unlock huge supplies of oil, has transformed the energy landscape and vaulted the United States to the upper echelon of global oil producers, behind only Russian Federation and Saudi Arabia. When Hurricane Katrina hit New Orleans in 2005, prices at the pump spiked all over Alaska.

On Thursday, Energy Secretary and former Texas Gov. Rick Perry approved the release of 500,000 barrels of crude oil to prevent fuel shortages and a spike in gas prices, the Associated Press reported. The report also showed US gasoline demand jumped to 9.846 million bpd last week as USA refining utilization rates rose to 96.6 percent, the highest percentage since August of 2015.

The refinery closures helped to push USA gasoline futures RBc1 to a two-year high of $1.7799 per gallon on Monday, though they had receded to $1.7466 by 1325 GMT on Tuesday.

The devastation killed at least 35 people and knocked an estimated 4.4 million barrels per day (bpd) from the refining capacity.

Motor fuel prices climbed as much as 6.6% in NY, advancing for an eighth session, while oil dropped even as USA crude inventories fell for a ninth week. As traders scrambled to cover their positions, they sent the price spread between the most immediate futures contract and subsequent deliveries sharply higher. But the market is not short of crude, which makes up the majority of the country’s strategic stockpiles. WTI is down 1.7 percent this week.