Harvey Hangover Hits Pump Prices, Jet Fuel Premium Highest Since 2008
“It’s only just beginning,” warned one seasoned veteran energy trader as the hangover from Hurricane Harvey flows downstream to retail gas prices and jet fuel premiums.
As Bloomberg notes, Harvey impact currently includes:
- Colonial says it’ll commingle Rbob and conventional gasoline
- Explorer Pipeline planning to start lines Saturday, Sunday
- Logjam grows to 29 oil tankers as 11 ports remain closed
- Total Port Arthur is said facing extended shutdown on power loss
- Texas storm bucks N.Y. traders with wild gasoline expiry swings
- NHC issues final advisory on Harvey; losing tropical character
Which has left retail gas prices at the pump are now at their highest in 2 years…
And judging by their usual lagged response to RBOB, are set to go dramaticaly higher in the next few weeks…
And while inventories are high, deliveries are slow and fears of shortages have created lines at many Texas gas stations…
“This is going to be a substantial ouch for consumers,” said Tom Kloza, global head of energy analysis for Oil Price Information Service. “Satan could not have drawn up a more horrible geographic scenario for knocking out Texas refining.”
But it is Jet Fuel premiums that are even more worrisome…
New York jet fuel’s premium to Nymex futures rises 20.5c to 36c/gal., widest since 2008, data compiled by Bloomberg show.
And U.S. Gulf jet fuel premium widens 10.25c to 19c/gal., also widest since 2008…
And unlike Gasoline – where inventories are high – Jet fuel inventories are below average.
The latest EIA data implies jet fuel inventory levels are just over 23 days of forward cover, seasonally-adjusted, 8% below the five-year average. Flooding and crude oil supply disruptions have led to the temporary closing of more than 21% of the country’s refining capacity, primarily in the Gulf Coast, contributing to further draws on jet fuel inventories.
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