Gasoline spikes after Harvey shuts down Gulf Coast refineries

Gasoline spikes after Harvey shuts down Gulf Coast refineries

Gasoline futures spiked on Wall Street on Thursday with several key refineries offline due to Harvey, which is now a tropical depression.

As of 10:40 a.m., U.S. gasoline futures were up nearly 12 percent as traders reacted to news that the nation’s largest refinery, the Motiva Enterprises facility in Port Arthur, Texas, could stay offline for two weeks after Harvey rolled through the region.

Reuters reports that plant operators could shutter the plant to assess and repair any potential damage caused by the storm, which made landfall last week as a major hurricane and caused record-setting flooding in parts of Texas.

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Energy Secretary Rick PerryJames (Rick) Richard PerryTexas Democratic megadonor dies at 46 Nuclear and coal are essential for reliable energy The Hill's 12:30 Report MORE warned Thursday that, “Gas prices are going to go up.”

As of Wednesday evening, up to 4 million barrels per day, or 22 percent of total U.S. refining capacity, is offline following Harvey, S&P Global Platts reported. As refining capacity falls, gasoline prices — both on Wall Street and at the pump — are expected to rise.

The Gulf Coast holds about half the refining capacity in the United States.

Motiva’s facility is the country’s largest, with a daily capacity of 603,000 barrels. Exxon Mobil’s Baytown refinery, the second largest in the United States, was also shut down on Wednesday afternoon, the company said.

Industry experts warned last week that significant damage to a major refinery could lead to a 25-cent-per-gallon gasoline price hike in the wake of the storm.

—Updated at 2:06 p.m.