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Energy Secretary: US gas prices will rise in Storm Harvey's wake

Energy Secretary: US gas prices will rise in Storm Harvey's wake

Harvey, which made landfall twice along the U.S. Gulf Coast, bringing torrential rains and floods, shut pipelines and took 4.15 million barrels a day, or 22 percent, of U.S. refining capacity offline, data compiled by Bloomberg show.

Additionally, Indian Oil says demand is strong enough for refiners that do not export to stick to domestic markets and enjoy cheaper feedstock and higher fuel prices. "That's oil. Oil still needs to be refined". The operator doesn't expect the pipeline to resume normal operations until Sunday.

US gasoline prices hit a two-year high above $2 a gallon on Thursday, but on Friday, as two refineries began to restart, the "crack spread" fell almost 11 percent, while gasoline futures fell 5 percent.

"The upside to Bakken producers, and those in Colorado and Wyoming, is they still have access to rail infrastructure", she said. Transporting oil by rail had fallen way off as companies built new pipelines to get oil to market.

Part of the Colonial Pipeline, which extends from Houston to NY, was shut down by the storm. "Our number one priority is public and environmental safety, and we continue to require operators to report spills, leaks or other incidents". "The value of crude is lower because it's stuck". Congress created it in 1975 amid fears the Arab oil embargo could cause long-term spikes in motor fuel prices that harmed the US economy. "The good news for consumers is that it seems some of the units are in the process of getting back in operation".

"Gasoline is coming, but instead of being a spigot it's more of a trickle", DeHaan said. "As the pipelines get back in shape and people realize that this isn't as big an issue as it feels like today, this (panic) is going to stem".

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The fuel prices soared overnight, with the national average rising 7 cents per gallon by Friday morning, and more increases expected over the Labor Day end of the week as refineries stay close around Harvey.

In recent days the agency granted waivers in Texas, Louisiana, Georgia and other states on rules that normally require the use of low-volatility gasoline during the summer.

Allison Mack, a petroleum industry analyst with GasBuddy.com, said a gasoline supply "squeeze", rather than a shortage, has driven up prices. "Once you see prices go up 10, 15, 20 cents or more, it may start to impact household budgets a little bit".

The 300,000 to 500,000 cars and trucks that Houston may have lost likely exceeded the 325,000 new vehicles sold in the region during the last 12 months, Smoke said.

How soon might prices in Buffalo return to pre-Harvey levels?

"The good news is that the major refiners report that in most cases there has not been major wind damage, so as the storm passes, refineries now shut down will be brought back online quite quickly", LaFlure said.

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