Thursday, September 7, 2017
Storm's Impact on Oil Industry is Felt at Gasoline Pumps
Oil prices in the United States rose due to Hurricane Harvey devastating the Gulf of Mexico and several offshore oil rigs. A large amount of the damage hit the South, but the country is being affected as a whole. Gas prices on average took a 5 cent jump across the nation at the end of August. This hurricane basically knocks Texas refineries out for the time being, depleting the price of crude oil (nowhere to refine it), and increasing gas prices at the same time. Tom Kloza, global head of energy analysis for Oil Price Information Service.
The cause of the increase is not damage to the refineries, but supply in general. This will hit lower paid Americans more, because a larger percent of their income goes towards gasoline. The situation could be relieved more shortly, because the Energy Department might release 500,000 barrels of crude oil, so gas prices can stabilize. This will be the first emergency release from the Strategic Petroleum Reserve since 2012.
https://www.nytimes.com/2017/08/31/business/energy-environment/storm-oil-industry.html?rref=collection%2Ftimestopic%2FOil%20and%20Gasoline&action=click&contentCollection=energyenvironment®ion=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=collection
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It will also be interesting to see to what degree this affects inflation. The indexes that include energy in their basket have kept inflation low due to the drop in enrgy prices over the recent year. So losing downward pressure on the price of the basket may see the rise in inflation that has not occured for some time.
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