Gas prices in West Central Kentucky decreased by a penny this week to $2.193 per gallon, according to AAA East Central’s Gas Price Report.
A flip-flop from last week’s trend of cheaper gas prices, the bulk of the Great Lakes and Central States region is selling gas that is more expensive this week. The price increases come as gasoline inventory also increases with a 1.3 million bbl build. Sitting at 52.7 million bbl of gasoline inventory and given its proximity to the Gulf Coast, the Great Lakes and Central states region could be tapped to help alleviate the tightness of supplies in Texas and surrounding areas caused by Tropical Storm Harvey.
This week’s average prices: Western Central KY Average $2.193
Average price during the week of August 21, 2017 $2.207
Average price during the week of August 29, 2016 $2.143
Average prices of unleaded self-serve gasoline in various areas:
$2.217 Bowling Green
On the National Front
As Harvey blasted Texas, gas prices shot up across the country. At $2.37, today’s national gas price average is four cents more expensive on the week and one of the largest one-week national gas prices surge seen this summer.
About one quarter of oil refining capacity in the Gulf Coast had been taken offline, according to forecasts by Oil Price Information Service (OPIS). That equates to about 2.5 million barrels per day. Harvey has also caused eight refineries in Texas to shut down, while several others are operating at reduced rates.
In Corpus Christi, Flint Hills, Valero, CITGO and Valero Three Rivers remain offline since initial shutdowns began in advance of Harvey late last week. Over the weekend, Valero reported its refineries in Corpus Christi and Three Rivers sustained “substantial refinery impacts” and the company is evaluating infrastructure needs to determine when the refineries can resume operations. Corpus Christi is connected via pipeline to refineries in San Antonio and Nixon, TX, which can supply Corpus Christi if local refiners are offline for an extended period.
On Sunday, Magellan Midstream Partners suspended all inbound and outbound refined products and crude oil transportation services on its pipeline systems in the Houston area. Conversely, the Colonial Pipeline said its Gulf Coast pipeline and terminals are continuing to operate normally, delivering gasoline from Houston to the Mid-Atlantic.
It is still too soon for the market to know how badly damaged energy infrastructure is from the storm, but the coming days will offer more insight into how long recovery and restoration may take. Demand shifts based on the storm and countermeasures the market will take to meet a new supply and demand landscape will also be evaluated.