Gasoline surges as Harvey closes major USA fuel pipeline

The Colonial Pipeline stretches 5,500 miles through 12 states including the Pelham junction and tank farm in Pelham Ala

The Colonial Pipeline stretches 5,500 miles through 12 states including the Pelham junction and tank farm in Pelham Ala

This sent cracks - the premium of the refined fuel over crude - higher in NY, while the storm also triggered a flurry of trans-Atlantic gasoline trading and disrupted exports of liquefied petroleum gas, causing prices to rise in Asia.

Flooding and power failures have reduced US fuel-making capacity by about 4.25 million barrels a day.

"Because of the shortage, you will likely see a price increase in the East Coast, which would incentivize the other refiners to shift gasoline yields", Rogers said.

Company officials said they hope Colonial can avoid a long suspension, which has anxious energy analysts, and raises the possibility of soaring gas prices and shortages in metro Atlanta and other communities across the Southeast. But the outages at the nation's top refineries along the Gulf Coast have forced the Colonial Pipeline company to announce on Wednesday that it was shutting down Line 2, which carries diesel and jet fuel due to "supply constraints".

The lines remain down from Houston to Hebert due to the storms.

"At this point, we're at a wait-and-see situation to see how much damage is done to those refineries in the Gulf Coast area", Carrasco said. They join more than 12 other plants with nearly a quarter of USA refining capacity.

"As a result of the continuing impacts on Gulf Coast-area refineries and disruption to the fuel distribution system caused by Hurricane Harvey, EPA Administrator Scott Pruitt today exercised EPA's emergency fuel waiver authority to help ensure an adequate supply of fuel throughout the South, Southeast and the Mid-Atlantic", according to an EPA press release.

BP Plc was said to be moving a tanker authorized to carry fuels between USA ports to Florida from New York Harbor, according to a person familiar with the cargo. In the Charlotte region, the average price of gas rose from 27 cents over the past seven days to $2.43, according to AAA.

By volume, Colonial is the largest pipeline operator in the country, delivering more than 100 million gallons of refined products each day to markets between Houston and New York City, serving more than 50 million people. "Electrical power, ability of personnel to reach the refineries, and distribution of crude oil and petroleum products remain potential challenges to quickly restarting the refineries".

The East Coast will start feeling the effects of Hurricane Harvey as the gasoline supplied from the Gulf Coast starts to dry up. Bloomberg reports that Valero Energy has stopped supplying gasoline stations that are not Valero-branded outlets.

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