Gasoline futures prices in the U.S. have risen more than 10% over the past two days to a two-year high as investors counted the cost of Tropical Storm Harvey’s devastation, which has taken out the equivalent of more than 3.6 million barrels of refining potential in the Gulf of Mexico region. Key distribution pipelines that take gas and distillate products to markets around the United States also have been hit, although most are still operating under reduced capacity.
But with flood waters in the Houston area not expected to peak until Thursday, the long-term impact of Harvey’s destruction likely will put a cap on gas price increases over the medium term as demand wanes amid what is anticipated to be a multi-billion dollar rebuilding effort in America’s fourth-largest city.
Curiously, U.S. crude oil prices aren’t reacting in the same way, with West Texas Intermediate crude futures for October delivery trading 0.6% lower from Tuesday’s New York close to $46.18 per barrel.
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