Colonial Pipeline expected to resume carrying fuel over weekend

Gasoline pipeline in Atlanta temporarily suspends operations due to Hurricane Harvey

Meanwhile, national gas prices jumped to a new record this year of $2.62 for regular gas - just a week ago prices were 30 cents lower, travel guide AAA reported.

"Consumers will see a short-term spike in the coming weeks with gas prices likely topping $2.50 per gallon, but quickly dropping by mid to late September", said Jana L. Tidwell, manager of public and government affairs for AAA Mid-Atlantic. It can transport up to 2.5 million barrels a day of gasoline, diesel and jet fuel, and is directly connected to several airports, including Nashville, Charlotte and Dulles International Airport in Washington, D.C. Analysts at S&P Global Platts estimate that nine refineries that are returning to service could produce about 50% of capacity, bringing the total reduction in refinery output to almost 4 million barrels a day, about 22% of total US refining capacity. As Tropical Storm Harvey hit southeast Louisiana on Wednesday, it brought torrential rains that shut the biggest USA refinery, owned by Motiva Enterprises in Port Arthur, Texas, and one nearby held by Total SA.

"The supplier of the product would need to get approval from the customer who is receiving the product", said Malesia Dunn, a Colonial spokeswoman, by telephone. That's causing prices at the pump to rise.

Wednesday's inventory report showing US crude stockpiles dropped to the lowest level since January 2016, along with a rise in gasoline demand, "point to a fairly healthy picture still", McGillian said in a telephone interview.

This past weekend's storm is moving on from the Gulf region; however, its impact on fuel supplies could be felt as far away as the East Coast.

Colonial is petitioning the Federal Energy Regulatory Commission to allow it to move so-called transitionary gasoline, a grade between summer and winter blend, which would ease the supply crunch.

Joshua Starnes, director of oil research, Americas, for Thomson Reuters, said some of the Houston-area refineries were starting to come back online as floodwater started to recede.

The U.S. Department of Energy announced today that it would be tapping into the nation's oil reserves in the wake of the Harvey destruction.

The company is instead directing gasoline deliveries to designated stores across all parts of the metro area, QuikTrip spokesman Mike Thornbrugh said.

Since Harvey hit last week, North Carolina has seen gas prices jump 18 cents.

At least two East Coast refineries have already run out of gasoline for immediate delivery as they scrambled to fill barges to markets typically supplied by the Gulf Coast, two refinery sources said.

As refineries turned off the lights, pump stations and terminals also were submerged by Harvey's days-long deluge, and operators such as Valero and Shell had no choice but to stop sending fuels.

"There is a shortage, and it simply has to do with the amount of refineries that are down and the amount of pipelines that are shut in", said Mike Thornbrugh, QuikTrip media relations.

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