Hurricane Harvey causes largest refinery disruption since 2008

by Talk Business & Politics staff ( 74 views 

Gross inputs to refineries along the U.S. Gulf Coast declined 34% or 3.2 million barrels per day in the week ending Sept. 1, from the previous week in which Hurricane Harvey made landfall, according to the U.S. Energy Information Administration. It was the largest drop since Hurricanes Gustav and Ike in 2008. Weekly refinery use in the region fell to 63%, from 96%, while other areas of the country were nearly unchanged.

More than half of U.S. refinery capacity is along the Gulf Coast, and Texas, where Hurricane Harvey made landfall, accounts for 31% of all the capacity. The Gulf Coast region also has 49% of U.S. crude oil storage capacity, and more than 40% of storage capacity for motor gasoline and diesel fuel.

After the hurricane, the Colonial Pipeline system was transporting petroleum products intermittently, and as of Sept. 6, it had resumed operations at reduced rates. The system, which transports the products from Houston to as far north as New York Harbor, normally operates at near full capacity, shipping up to 2.5 million barrels per day of gasoline, diesel and jet fuel.

The East Coast drew down inventories of motor gasoline as supplies were disrupted. In the week ending Sept. 1, the inventories fell 3.5% for 2.2 million barrels, from the previous week.

Since the hurricane, the average price of a regular gallon of gas in the United States has risen 28 cents per gallon to $2.68 per gallon, on Sept. 4, up from $2.40 per gallon, on Aug. 28. In the Gulf Coast region, which includes Arkansas, the average price has risen 35 cents per gallon to $2.51 per gallon. These are the largest weekly increases in gasoline prices since Hurricane Katrina in 2005.