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Harvey Update: Refineries Shut Down, Gas Prices Soar, but Ultimate Effects Uncertain

While the ultimate effects of Hurricane Harvey on the energy industry are still unclear, one thing is certain: the storm has significantly slowed production. Flooding caused by Harvey has forced some of the country’s largest refineries to shut down, including some owned by Exxon Mobil, Shell, Phillips 66 and Petrobras; this means that more than a tenth of the nation’s refining capacity is out of commission for the moment, according to the Dallas News.

Over the weekend, as much as 25% of the oil and gas produced in the Gulf was halted, but S&P Global Platts Energy reported that production was picking up a bit as of yesterday. While refineries are built to withstand severe storms, says David Hold, president of the Consumer Energy Alliance, it is difficult to determine the impact of the storm on fuel prices.

Overall, Predictions Are Pretty Impossible… 

“We just simply don’t know yet the damage all this rain will have on Houston’s energy infrastructure,” Andrew Lipow, president of energy consultancy Lipow Oil Associates LLC says (via Reuters). Refineries in Texas could be offline for as much as a month, if their storm-drainage pumps become submerged

While the full impact of the storm on energy prices is yet to be seen, it will be “felt globally and affect energy markets for many weeks,” said an FxPro analyst (via Business Insider). The article pointed out that while US economic growth more than halved in the quarter just after Hurricane Katrina hit Louisiana in 2005, it rebounded in early 2006.

One Thing Is Certain: Fleet Owners Face Gasoline Price Surges

While the overall effect of the storm on energy markets remains uncertain for now, one thing is clear: companies that operate their own fleets are already being affected by gas spikes, with prices expected to jump by as much as 25 cents per gallon along the coast, and perhaps by as much as 15 cents in other areas, according to Patrick DeHaan, senior petroleum analyst for GasBuddy.com (via the Dallas News).

In the meantime, GasBuddy.com is helping drivers identify areas where there are shortages and where gas is available via its crowd-sourced Gasoline Availability Tracker.

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