Hurricane Harvey likely to increase gas prices in South Florida
Meteorologists expect Harvey to intensify
MIAMI – A disruption in gasoline supplies will likely have an effect on prices at the gas pump in South Florida, and Hurricane Harvey is expected to hit a refinery-rich stretch in the Gulf Coast.
Oil and natural gas operators in the Gulf of Mexico started evacuations at 39 offshore platforms, according to the U.S. Bureau of Safety and Environmental Enforcement. This shut down about 10 percent of oil production.
Patrick DeHaan, an analyst with Gas Buddy, said U.S. consumers should expect to notice the "Harvey effect" starting Thursday night. During Hurricane Katrina in 2005 consumers experienced a 40-cent increase overnight.
"The good news is this isn't Hurricane Katrina," DeHaan said.
Harvey grew from a tropical depression into a Category 1 hurricane. Meteorologist forecast a Category 3 hurricane. The flooding and power outages to follow Hurricane Harvey will also have an effect on gas prices. Refineries will have a chance to assess the damage Monday.
According to the U.S. Energy Information Administration Florida is one of the five largest energy-consuming states. The gasoline supply comes mostly from Gulf Coast refineries and relies on waterborne cargoes and tanker trucks for distribution.
Tom Kloza, an analyst with the Oil Price Information Service, said consumers should expect an increase of 5 to 15 cents per gallon. But if Hurricane Harvey damages a refining center, Kloza said there could be a 25-cents increase by Labor Day.
Floridians paid about $2.30 per gallon Thursday, according to AAA. It's lower than the national average of $2.34. Average gas prices in Florida during the second half of August range from $2.47 to $2.13.
"Prices were already climbing due to pre-existing refinery issues in the region," Mark Jenkins, a spokesman for AAA and the Auto Club Group, said in a statement. "This storm could cause more refinery closures and prevent tankers from moving fuel in and out of Texas ports."
Meteorologists were expecting Harvey to grow into a monster storm while it moves over the Gulf of Mexico where water is about 87 degrees. They were forecasting the rainfall to be as high as 35 inches through Wednesday from Texas to Louisiana.
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