Gasoline futures continue to soar on Harvey-related outages

Storm Harvey paralyses a fifth of US fuel output

Harvey feuling rise in gas prices

In Europe, benchmark gasoline margins jumped to a two-year high of almost $21 per barrel.

But that does little for the Colonial Pipeline, which depends on refineries further up the coast along the Texas-Louisiana border, an area that was dealing with catastrophic flooding mid-week.

Colonial Pipeline Co, the biggest US fuels system operator, on Sunday said it would address storm-related gasoline shortages by seeking federal approval to move nonsummer grade gasoline from Texas to the Northeast.

USA gasoline futures spiked 14% to $2.163 per gallon in recent trading.

The pipeline has been limited due to the effects of Harvey.

Colonial continues to operate from Lake Charles east.

That artery can carry 3 million barrels of gasoline and other products daily.

On Wednesday Valero told its East Coast customers that it would stop supplying customers that don't carry its logo at all northeast terminals from Pennsylvania up to ME, according to a customer who asked not to be named because the information isn't public.

The SPR's size should not be cut for revenue purposes, since it remains an important cushion against global price shocks and supply disruptions even while the U.S.is seeing domestic supplies increase.

"It's only going to get worse as we head into Labor Day weekend", he said, adding that anytime prices are up, it eats into money that could be spent on food or shelter.

"As Harvey continues to wreak havoc, consumers will see a short-term spike in the coming weeks with gas prices likely topping $2.50 per gallon, but quickly dropping by mid to late September", said John B. Townsend II, AAA Mid-Atlantic's Manager of Public and Government Affairs.

Tropical Storm Harvey's effect on the energy industry has spread beyond flooded United States refiners as fuel pipelines are also shut, threatening a supply squeeze around the country and roiling world markets as traders scramble to find alternative supplies. The U.S. Energy Department said Thursday that it would release a half-million barrels of crude oil from the Strategic Petroleum Reserve to combat fuel shortages and stabilize gas prices, which have risen by an average of 6 cents a gallon since Harvey hit over the weekend, according to AAA.

The operator of a major gasoline pipeline expects to resume carrying fuel in the Houston area by Sunday, potentially avoiding a lengthy shutdown that would intensify gasoline shortages and prices.

Those braving the lines were finding prices in Cleburne ranging from $2.19 at H-E-B Grocery store to $2.36 at Valero on East Henderson Street. It carries 2.5 million barrels of refined products per day, or as the FT notes, "roughly one in every eight barrels of fuel consumed in the country".

All of these problems have sent gasoline prices surging. Drivers paid $2.25 a gallon there as prices jumped in North Carolina 7 cents overnight.

The pipeline also shut down a year ago when an explosion hit the pipeline in Alabama.

In response, President Donald Trump is releasing half a million barrels of oil from the US reserve to keep gas prices in check.

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