Global fuel prices jump as Harvey's impact ripples beyond U.S. Gulf

Tropical Storm Harvey’s impact on the energy industry spread worldwide as flooded U.S. refiners and closed fuel pipelines threatened to squeeze national supply, roiling global fuel markets and rerouting millions of barrels of fuel to the Americas to avert shortages. 

The storm, which lashed Louisiana with rain on Thursday, has pummeled the U.S. Gulf Coast, immersing Houston, Texas, and the surrounding area in several feet of water and forcing the closure of about a quarter of U.S. refining capacity. 

Benchmark U.S. gasoline prices RBc1 and margins RBc1-Clc1 surged anew on Thursday. The jump came after the Colonial Pipeline, the biggest U.S. fuel system, said it would shut its main lines to the Northeast by Thursday amid outages at pumping points and lack of supply from refiners.

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

On Thursday, the U.S. Energy Department said it would release 500,000 barrels of crude oil from the Strategic Petroleum Reserve to supply the refineries that are still running in an effort to stem fuel shortages. 

The first emergency release from the reserve since 2012 will be delivered to the Phillips 66 (PSX.N) refinery in Lake Charles, Louisiana, according to a department statement. 

Concerns over fuel shortages ahead of the U.S. Labor Day extended weekend were mounting, said analysts at JBC Energy. 

U.S. gasoline futures RBc1 topped $2 per gallon for the first time since 2015, up more than 20 percent since just before the storm began, while U.S. crude oil prices were on track for their steepest monthly losses in more than a year.

Average U.S. retail fuel prices have surged by more than a dime per gallon from a week ago, the AAA said early on Thursday.