Harvey causing gasoline price increases in Pennsylvania

Harvey has taken 25 percent of oil and natural gas production offline

As of Wednesday, well over 20 percent of US refining capacity was shut down. The contract settled up 2.8 percent on Thursday.

Western Canadian Select strengthened on Thursday, with the discount to futures shrinking 50 cents to $11.25 a barrel, data compiled by Bloomberg show. National average gasoline prices have climbed barely 3% over the past week, to $2.40 a gallon for regular, according to AAA.

Oil traders are rushing to book tankers to haul European gasoline across the Atlantic Ocean as Hurricane Harvey transforms the global market for refined fuels.

The two refineries join more than a dozen others with a combined ability to produce more than 4 million barrels a day, or about 23 percent of USA capacity, that are at least partially offline.

About 19 percent of oil refining capacity on the Gulf Coast is offline.

XAutoplay: On | OffThe Energy Information Administration will release data at 10:30 a.m. ET today on oil inventories and production from last week, before the catastrophic storm slammed into the south Texas and the Gulf Coast.

Gasoline stocks USOILG=ECI rose by 35,000 barrels, compared with analysts' expectations in a Reuters poll for a 1.0 million-barrel drop. Following the meeting, was signed an agreement to reduce oil production by a total of 558,000 barrels per day starting from January 2017. The Strategic Petroleum Reserve (SPR), a series of underground caverns in Louisiana and Texas, holds 678.9 million barrels of crude, enough to meet total USA needs for 33 days. They were trading 1.4 percent up at $46.58 a barrel at 1352 GMT.

USA gasoline futures hit a new a two-year high on Thursday (31 August), after Storm Harvey made a second landfall over the Louisiana coastline resulting in the closure of America's largest refinery and another key regional pipeline.

Gas Prices Skyrocket in North Texas After Harvey
Gas Prices Skyrocket in North Texas After Harvey

Colonial said it hoped to make "intermittent" deliveries from points on the line east of Lake Charles, Louisiana, but was unlikely to have the line fully operational from Texas before Sunday. Futures prices represent the wholesale value of fuel without taxes, transportation, or other expenses included.

As of the close on Wednesday, WTI was at $45.96 a barrel, some $4.90 below Brent, a far bigger discount than the $2.62 that prevailed at the start of August.

While most auto owners are feeling the strain at the pump, others are saying it's nowhere near as bad as previous years thanks to their fuel efficient vehicles.

"The market has turned in reverse pretty sharply", said Gene McGillian, manager of market research at Tradition Energy.

"Everything is fine until you get a surge in demand", said Alan Gelder, vice president of refining and oil at Wood Mackenzie, adding that "the fear of shortages. can actually create shortages".

The eventual impact to gas prices is likely to be limited by the US shale oil boom.

That's down 14.5% from record levels reached in March.

Senator Edward Markey, a Democrat, urged the department this week to also release gasoline from the country's emergency gasoline reserve, which holds a total of 1 million barrels of oil in three locations in the Northeast: New York Harbor, Boston and Maine.

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