Gas prices on Long Island could rise 3 cents to 5 cents per gallon daily for the next week as the Gulf Coast cleans up after devastating flooding from Hurricane Harvey, an industry analyst said Thursday.
The average price for regular gasoline on Long Island has risen 6 cents in the past week, to $2.57 per gallon on Thursday, according to AAA, the motorist group. It rose 3 cents per gallon in the past day.
“Everyone is going to feel this for the next week or so,” said Andy Lipow, president of Lipow Oil Associates in Houston. “Then it will level off.
“But I think it will end up going up 20 cents to 30 cents per gallon over the next week,” he said.
The Northeast is less reliant on Gulf Coast gas than other parts of the country, Lipow said. But because of the storm’s effect on Gulf Coast refinery output, some of the gas that would normally come here will be routed elsewhere, squeezing supplies.
It makes sense to fill up the car before prices rise further, added Dan McTeague, senior petroleum analyst at Boston-based GasBuddy.com.
“You don’t have to go crazy, you don’t have to panic, but it would be a good idea to fill up because prices are going to continue to rise,” McTeague said. “Once we see the damage, we will have a better idea of how long prices will rise. In time, prices will come back to normal.”
In addition to affecting refining capacity, the storm also has caused the partial closure of the Colonial Pipeline, which runs from Houston to New York harbor.
The pipeline operator estimates it can resume carrying fuel in the Houston area by Sunday, potentially avoiding a lengthy shutdown that would intensify gasoline shortages.
The Colonial Pipeline provides nearly 40 percent of the South’s gasoline. It runs underground and is now under water in many parts of Texas, where inspections are needed before it can be fully operational again, Colonial spokesman Steve Baker said Thursday.
The Georgia-based company remains able to operate its pipeline from Louisiana to states east and northeast of there, though deliveries will be “intermittent,” the company said.
The Colonial Pipeline is “the major artery that delivers fuel to the Northeast and it’s still operational, but not between Texas and Louisiana,” said Tom Kloza, global head of energy analysis at Oil Price Information Service, which tracks the fuel industry. “So it’s like a partially blocked artery at this point.”
Energy Secretary Rick Perry said Thursday he is releasing 500,000 barrels of crude oil from an emergency stockpile in a bid to prevent gasoline prices from spiking. Perry said he’s authorized immediate shipments of crude to the Phillips 66 refinery in Lake Charles, Louisiana.
West Texas Intermediate crude, the U.S. benchmark, settled at $47.23 per barrel Thursday, up $1.27. Brent crude oil settled at $52.38, up $1.52.
“Crude won’t be much of a factor” in gasoline prices, McTeague said. “The strategic supply was opened up, but it can’t be used because of the refineries, so it’s stranded.”
AAA on Thursday reported the average price for regular gasoline in Texas was $2.26 per gallon. That’s 12 cents higher than a week ago, before Harvey made landfall, and 4 cents higher than on Wednesday.
U.S. prices for regular gasoline averaged $2.45 per gallon on Thursday, 10 cents higher than a week ago and 5 cents more than on Wednesday, according to the AAA survey.
Harvey made landfall along the Texas coast last Friday and lingered in the region for days, causing catastrophic flooding, killing at least 32 people and causing major disruption to the region’s energy sector.