Colonial Pipeline expected to resume carrying fuel over weekend

04 September, 2017, 06:52 | Author: Barbara Daniel
  • Gasoline pipeline in Atlanta temporarily suspends operations due to Hurricane Harvey

Colonial, which carries fuel from Gulf Coast refineries to the East Coast, indicated Wednesday many smaller lines branching off from its main artery will shut in addition to its two main Lines 1 and 2. Colonial Pipeline, which operates the pipeline that moves almost 40 percent of the South's gasoline, estimates that it will resume carrying fuel through Texas by Sunday.

The Colonial Pipeline, which stretches up and down the northeast coast, supplies about 100 million gallons of refined gas a day to New York City and other cities all along the coast.

ExxonMobil Corp said on Sunday that its Hadrian South subsea production system and Galveston 209 platform in the U.S. Gulf of Mexico were back online after shutting due to storm Harvey, a spokeswoman said in an email on Sunday.

"We are going to have outages from Texas to Boston", said one East Coast market source.

Fuel typically costs him about $25 a day at the most, he said, concerned the storm could eat into his profits.

The pipeline had been operational through the worst of the Hurricane, easing fears about supply disruptions.

And gas prices have spiked.

One Chevron station in downtown Dallas that sold regular gas for $2.29 a gallon just before the storm was charging $2.99 on Thursday.

Hurricane Harvey potentially has cut US fuel-making capacity to the lowest level since 2008 after its initial strike on the Texas coast late last week. The supply crunch prompted QuikTrip, one of the nation's largest convenience store chains, to temporarily halt gasoline sales at about half its 135 stores in the Dallas-Fort Worth area.

"We continue to work expeditiously to complete final repairs to our facilities damaged by the storm, and to assess our lines and right of ways to ensure the integrity of our system between Houston and Hebert", the company said in a news release.

USA 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 US crude oil prices were on track for their steepest monthly losses in more than a year. These closures meant a loss of 2 million gallons of gasoline per day. Colonial told its shippers Thursday that it will start taking the fuel, which is less expensive to make because of its higher Reid vapor pressure, but only if the shipper's customers says they'll accept that quality. Gasoline prices jumped a nickel overnight across the Washington metro area and the state of Virginia, and pump prices jumped seven cents within the past 24 hours in Maryland.

Two refineries in the Gulf Coast region are operating at reduced rates. With an eye on the nation's fuel supply, the Department of Energy authorized a release of crude oil from the strategic petroleum reserve in order to help Phillips 66 get its Lake Charles refinery up and running.

Outages from Hurricane Harvey and the subsequent price volatility provide a reminder that despite the enormous changes on the USA supply side over the past decade, the country is still dealing with energy security vulnerabilities.

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