At $2.40, today's national gas price average is six cents more expensive on the week and one of the largest one-week national gas prices surge seen this summer. Gasoline settled up 25.52 cents, or 13.54 per cent, at $2.1399.
Traders have tentatively booked this week almost 40 tankers - the equivalent of about 1.5 million tonnes of gasoline - out of Europe to carry gasoline on the transatlantic route, including to destinations such as New York, Mexico and Brazil, according to shipping data and traders.
Damage and delays from Tropical Storm Harvey will hold the USA oil industry back from achieving a targeted 10 million barrels per day of production anytime soon, according to analysts, a setback in America's fight for global market share with OPEC. Harvey is moving east toward refinery centers in Louisiana and a research note from Goldman Sachs said as much as 10 percent of the regional refinery capacity could be offline for several months, based on comparisons from Hurricanes Katrina and Rita.
The devastating impact of the storm on oil infrastructure in the heartland of the USA energy industry, prompted the government to tap its strategic supplies and release 1 million barrels of crude oil to support refinery activity, as fears over fuel shortages remain front and center.
Traders were also scrambling to redirect fuel to the United States.
In contrast with previous major hurricanes such as Katrina in 2005, Harvey has actually seen oil prices edge down, as traders focused more on the hit to demand from damaged USA refineries than the blow to supply from knocked-out production.
Gasoline stocks USOILG=ECI rose by 35,000 barrels, compared with analysts' expectations in a Reuters poll for a 1.0 million-barrel drop. It now is at 679 million barrels. While those production facilities are down, the US market is losing about 3 million barrels of gasoline a day. They were trading 1.4 percent up at $46.58 a barrel at 1352 GMT.
Harvey pummeled the heart of the USA energy industry in Texas, dumping a record amount of rain and triggering catastrophic flooding in Houston.
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The Phillips 66 refinery in Lake Charles, Louisiana, will receive crude from the strategic reserve as part of an agreement requiring the company to replace the oil once supplies are flowing again.
Traders from Europe to Asia were scrambling to fix fuel cargoes to the USA, with price reporting agency Argus registering a record monthly trade volume of European gasoline barges. It was still on track to close the month down just under 6 percent, the steepest monthly loss since March.
Worldwide benchmark Brent crude was at $51.22, up 36 cents from the previous session, when the contract fell more than 2%. It had fallen more than 2 percent in the previous session. "It's a business and if you don't want to spend it, then I guess don't drive", Samarah said.
Traders booked 20 tankers to load European fuels to the USA since Harvey made landfall on August 26, according to charter lists compiled by Bloomberg.
At the same time, the amount of crude entered into refineries reached a record high of 17.73 million bpd, the data showed.
While damage from Harvey is severe, we can hope that disruptions to oil production and refineries will prove temporary.
"As a result, increased gasoline flows from Europe to the USA will continue at least for three to four weeks".
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