× Gas prices will jump thanks to Hurricane Harvey, experts say

Gas prices are going to jump in some parts of the country as Hurricane Harvey nears the Texas coast. A gallon of gas is a penny more expensive than it was a day ago, but it will ultimately cost between five and 15 cents more, according to Tom Kloza, chief oil analyst for the Oil Price Information Service. Hedge funds and money managers, meanwhile, trimmed their bullish bets on U.S. crude futures and options positions for the third straight week in the week to Aug. 22, data showed. Platforms and rigs were shut down in anticipation of the storm, which made landfall late Friday as a Category 4 storm but weakened mid-Saturday into a tropical storm. Refineries, terminals, onshore and offshore production operations and other infrastructure have shut or begun storm preparations with Harvey set to make landfall on the Texas coast on Friday night or early on Saturday. “You’re seeing prices move up because refiners have to take precautionary measures,” Kloza said. About 22 per cent of US Gulf of Mexico oil production is offline due to Hurricane Harvey, the US Department of the Interior’s Bureau of Safety and Environmental Enforcement (BSEE) said on Friday. Patrick DeHaan, a senior petroleum analyst with GasBuddy, said he expects the national average to go up between five and 10 cents as soon as Thursday night. "Most of the increases, at least right now, would probably be in the South, the Southeast and the mid-Atlantic," said Patrick DeHaan, a senior petroleum analyst with GasBuddy. Related: Tanker becomes first to cross Arctic without icebreaker

The good news is that gas prices are currently low. On average across the country, gas cost $2.35 per gallon on Saturday, according to AAA. That said, the situation on the ground is still developing, and damage from the storm could be worse than expected, DeHaan said. And Harvey is headed toward an area that’s immensely important for U.S. oil production. The Gulf Coast accounts for 17% of total U.S. crude oil production and 45% of total U.S. petroleum refining capacity, according to the Energy Information Administration.
Oil prices rise in anticipation of Harvey's impact on production in the Gulf of Mexico.