Hurricanes upending American energy markets

Irma prompting fuel shortages, Texas is still working to recover from Harvey and Katia could crimp supplies for eastern Mexico.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   Sept. 8, 2017 at 7:13 AM
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Sept. 8 (UPI) -- Lingering and potential threats from hurricanes off the southern U.S. coast are testing everything from gasoline supplies to oil production, analysis finds.

Hurricane Irma is a Category 4 storm expected to make landfall on southern Florida by Saturday afternoon. It follows Hurricane Harvey, which made landfall in south Texas in late August and forced several refineries and production centers offline.

A snapshot of the market impact from the hurricanes emailed from commodity pricing group S&P Global Platts found several terminals in the Caribbean were down because of Irma. Buckeye Partners closed a facility in Puerto Rico earlier this week, sidelining about 4.6 million barrels of storage capacity. The company is just one of a handful shutting down operations as Irma makes its way north toward the Florida coast.

With no refineries of its own, Florida depends on offshore shipments for nearly all of the delivery of its refined petroleum products and the U.S. Coast Guard is expected to shut some of those ports ahead of the storm. According to GasBuddy.com, which monitors local retail markets, as many as 40 percent of the service stations in some parts of Florida are without gasoline.

Florida Gov. Rick Scott directed state police to escort fuel delivery trucks to hurricane evacuation routes. Emergency contractors, meanwhile, have secured 1.5 million gallons of fuel and the state is working to explore additional options for port deliveries.

For Texas, refineries and producers are starting to return to service after Harvey. Platts estimates about 6 percent of the total U.S. refining capacity is still down because of the impact and some producers in the Eagle Ford shale basin in Texas said Harvey has impacted operations by "a pretty significant extent."

Hurricane Katia, a Category 1 storm, is moving inland toward Mexico's eastern shore and could make landfall early Saturday morning. Platts reported that Katia could impact Mexico's port loading activity. Eastern Mexico consumes about one third of the nation's total gasoline and a quarter of its diesel and about three quarters of its supplies enter the country through ports on the Gulf of Mexico.

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