AAA: Hurricane Harvey To Impact Florida Gas Prices As Gulf Refineries Shut Down
By Space Coast Daily // August 25, 2017
forecast to intensify into a category 3 hurricane
ABOVE VIDEO: Hurricane Harvey is not heading for Florida, but its effects will likely be felt in the Sunshine State in the form of higher gas prices. (HuffingtonPost.com video)
BREVARD COUNTY, FLORIDA — Hurricane Harvey is not heading for Florida, but its effects will likely be felt in the Sunshine State in the form of higher gas prices.
Harvey is forecast to intensify into a category 3 hurricane before reaching the Texas and western Louisiana coastlines. Nearly half of U.S. refining capacity sits on the U.S. Gulf Coast; nearly one-third of it appears to be in Harvey’s path.
“This could be a big deal especially for Florida motorists,” said Mark Jenkins, spokesman, AAA – The Auto Club Group.
“Florida pumps are primarily supplied by gasoline that sails over from refineries in Texas, Louisiana and Mississippi. Prices were already climbing due to pre-existing refinery issues in the region. This storm could cause more refinery closures and prevent tankers from moving fuel in-and-out of Texas ports, which would cause gas prices to surge from 10-30 cents.”
Harvey is forecast to make landfall near Corpus Christi, where there are three gasoline refineries, representing about 4.2 percent of U.S. capacity.
The Houston refining market could also be impacted by the storm. The Houston/Texas City/Baytown region has 11 refineries, representing 14 percent of total U.S. processing capacity. If the storm makes landfall further east of its current path, the impact on refineries could be even greater.
Our partner at OPIS says the most serious threat is wind damage impacting power supplies. However a longer lasting storm that dumps significant amounts of rain could cause major flooding problems impacting equipment, taking a long time to recover from.
It is said that if a Category 1 hurricane hits a refining center, it would take about a week to get operations back to normal. For a category 2 hurricane, it would take 1-2 weeks to recover, and 2-3 weeks for a category 3.
Where Harvey goes after making landfall is important. If the storm lingers near the coast, it could cause extended closures in shipping channels, which would interrupt deliveries to Florida.
Extreme flooding and loss of electricity would impact pipeline operations, interrupting the supply chain for states along the eastern seaboard.
Prices Gaining Ground
The storm is having a mixed impact on the futures market. Oil prices are moving lower, as the threat of refinery closures implies lower demand for oil.
However, gas prices on the NYMEX are up 4 cents so far today, as there is typically a surge in demand before the storm.
Floridians using the free AAA Mobile App are seeing gas prices averaging $2.30 per gallon. The state average rose 5 cents in the past three days.
That number should climb even more through the weekend and into next week, as the effects of this storm play out.
Some of the bigger price gains, over the past week, are in Tampa (10¢), Orlando (10¢), Fort Myers-Cape Coral (7¢), and the region of Bradenton-Sarasota-Venice (6¢).
What all these market have in common is they are supplied by ships making fuel deliveries on Florida’s west coast.
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