Will Hurricane Harvey Affect Gas Prices? Texas Oil Refineries Were Hit Hard
Hurricane Harvey's trajectory through Texas stunned Americans across the United States. On Friday, the hurricane was classified as a Category 4 hurricane by the The National Hurricane Center, then it was lowered to a Category 1 storm by Saturday. In spite of the downgrading in its categorization, the hurricane inflicted incredible damage on Southeastern Texas with flooding, power outages, washed-away storefronts, submerged homes, and at least five deaths, according to officials. In addition to all of this, CNN Money reported that Hurricane Harvey led to a spike in gas prices over the weekend throughout the country.
The reason behind an uptick in prices for gasoline features — which is a reported 7 percent — is directly related to geography, it seems from the report. If you remember, the pathway of Hurricane Harvey showed it drifting toward Texas from the Gulf of Mexico. From there on, the hurricane made a landfall in Texas on Friday, pummeling Houston and Corpus Christi.
In both areas, there are oil-rich refineries which were hit and subsequently shut down by Harvey's devastating impact. Such an outage of power at a refinery can halt the processing of millions and millions of barrels of crude oil, which needs to be refined before it can be sold as wholesale gasoline. In other words, with the shut-down refineries, there won't be enough gas for drivers in the country.
Leading weather analyst Jacob Meisel of Bespoke Weather Services told CNBC that oil refineries are ill-equipped to face powerful natural disasters like Harvey. Given such inadequate infrastructure, it is only natural for a hurricane like this one to collectively affect an entire country's access to gasoline.
"We're now dealing with a storm the likes of which we have not seen in the past 10 years. A storm that's this slow-moving with impacts that are going to play out through the first half of next week, as well, makes it something that's extremely unpredictable," Meisel said. It's not just Harvey that's done significant damage to gas prices in America. Other hurricanes like Katrina, Isaac, and Rita have also affected the price of gasoline features in their wake.
Still, the report shared some good news with its readers. Such a spike in prices isn't forever. In fact, an increase in gasoline prices tends to have an approximate lifespan — and it's fairly brief. After a natural calamity like Hurricane Harvey, experts say that the prices for gas tend to stay up for about two to four weeks. Then they return to the former normal rate. So drivers needn't worry — for now.