The Gulf Coast also saw higher gasoline prices, increasing by 35 cents/gal since last week. Now that Harvey is gone - and the upcoming Hurricane Irma, as threatening as it is, isn't likely to reduce gasoline production - it would be fair for prices to come down overnight.
Gasoline inventories fell by 2.544 million barrels for the week-ending September 1, against a larger expected draw of 5.0 million barrels. In Alabama, $2.47 and in Texas, the price is $2.48.
Front-month gasoline futures surged more than 25% in August as Harvey forced shutdowns of key refineries, pipelines and ports that produce and dispatch much of the continent's fuel. U.S. benchmark West Texas Intermediate (WTI) futures traded eight cents higher at $47.37 per barrel as demand for oil recovered.
However, prices received some support from rising demand in the United States, where Gulf Coast refineries are restarting in the wake of Hurricane Harvey that hit the region less than two weeks ago. Prices were little-changed after industry data showed U.S. crude stockpiles increased last the week. Gulf of Mexico's oil production, or 96,000 barrels of daily output, remained shut on Sunday, the federal Bureau of Safety and Environmental Enforcement said.
Harvey has set a record for the greatest amount of single-storm rainfall for the continental U.S. Through Friday, the storm continued to threaten heavy rain to parts of Louisiana and eastern Texas with 3-6 inches and even move into western Kentucky with 10 inches of rain. The lowest price for a gallon of regular nationwide is $2.33 in Oklahoma.
Hurricane Irma, the most powerful storm to form in the open Atlantic Ocean, was moving toward Puerto Rico late on Tuesday.
"Traders are hopeful that crude backlogs will be cleared", said Jeffrey Halley, senior market analyst at futures brokerage OANDA. Two refineries in the Gulf Coast region are operating at reduced rates.
Three million barrels of the reserves will reach Marathon Petroleum Corp and another 500,000 bpd will reach Valero Energy Corp. from the reserves at the Bayou Choctaw site, according to Bloomberg. In August 2005, gasoline spot prices rose almost 30% within one trading day after the landfall of Hurricane Katrina in Louisiana. "Although prices are now reacting to refineries restarting operations, Irma will push crude down again as it's approaching near Florida". "We expect the refinery to initially return to approximately 40% production by the end of this weekend, provided that the final assessments meet our operational standards", Motiva spokeswoman Angela Goodwin said in a statement.
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