Gas prices surge higher as drivers rush to fill their tanks

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Gas prices surge higher as drivers rush to fill their tanks

According to the AAA, the average national price of a gallon of regular unleaded gasoline was $2.519 early on Friday, the highest of 2017.

Benchmark European gasoline refining margins, which measure the profit of converting crude oil into the road fuel, rose to around $21 a barrel on Thursday, a two-year high.

One reason is that there are ample stockpiles of gas, which helps compensate for the loss of Gulf Coast refineries.

A Democratic senator is asking federal officials to tap into emergency reserves of petroleum as a way to alleviate potential gas price spikes after Hurricane Harvey.

"Refineries outside the affected area may delay maintenance to benefit from high processing margins", said Commerzbank oil analyst Carsten Fritsch. He predicted that gas prices will rise 15-35 cents per gallon, but could increase more.

The coming days, with Corpus Christi refineries working to come back online and Houston/Galveston beginning to dry out, will offer more insight into how long total recovery and restoration efforts may take.

In addition to refinery shutdowns, several major pipelines continue to operate at reduced rates, have shut down or plan to shut down due to lack of supply.

United States crude oil stocks fell sharply last week as refineries raised output with the approach of Harvey, the Energy Information Administration said.

"Data available so far point to sizably larger refining than production disruptions", US bank Goldman Sachs said.

Stations started running out of gasoline in Dallas following a social media reports that there was a Harvey-inspired shortage, even though one expert said the run on gasoline there was caused by the drivers panicking and topping off. Supplies might have lasted if drivers conserved what they already had in the tank.

The oil market outside the USA remains well supplied with ample production by the Organisation of the Petroleum Exporting Countries. The refinery interruptions have worsened as Harvey moved east on Wednesday, slamming into the Louisiana coast near the Texas border. The proposal, on top of planned auctions expected over the next few years, could push the reserve below 300 million barrels by 2025. A third of the nation's refining capability could be restricted for weeks.

Port Houston and the Port of Galveston said they would reopen today, the newspaper reported.

All of this means there is a lot less supply of gasoline, leading to higher gas prices.

The gap between Brent and WTI crude prices has soared to nearly $6 a barrel this week, the widest gap seen in two years.

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