'THIS IS BAD:' Gas prices spike by the most in a decade after Hurricane Harvey

pulse

September 1, 2017 6:02 PM

Gas just had its biggest one-day jump in a decade.

Gasoline prices jumped to two-year highs Friday as Hurricane Harvey continued to paralyze refineries and pipelines in Texas.

The disruptions have extended beyond the Gulf Coast, as distribution is changed to cater to places with the worst shortages ahead of the Labor Day weekend.

"This is bad," said Allison Mac, a petroleum analyst at the price provider GasBuddy.

"Last year we issued a press release about the cheapest Labor Day we’ve seen in 12 years. This year, obviously, that’s not the case."

According to the AAA, the average national price of a gallon of regular unleaded gasoline was $2.519 early on Friday, the highest of 2017. It was up about seven cents from $2.449 the previous day, the biggest single-day jump in 10 years according to Bloomberg.

Motiva's Port Arthur refinery, the largest in the US, shut down on Wednesday and will be closed for at least two weeks, Reuters reported.

Gasoline futures for October delivery fell on Friday for the first time in five days, or since the Hurricane made landfall a week ago. The contract fell by as much as 3% to $1.7189 per gallon.

Earlier this week, the Department of Energy released 500,000 barrels from its Strategic Petroleum Reserve to a Phillips 66 refinery in Louisiana to make up support the shortfall from offline facilities in Texas.

"I think prices will continue to go up for another week or so but there should be some relief by mid-September" as refineries come back online, Mac said. "I do highly encourage people to not panic because that's not going to help the situation."

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