The energy market impact from Hurricane Harvey, including at the consumer level, could spill into next week, according to analyst and company statements. If wind damage and flooding keeps refineries shut for two weeks, the entire United States will begin seeing severe fuel shortages. Flooding is expected to be "epic" with 25 to 50 inches of rain falling on southern Texas over the next three days.
Harvey was a Category 2 hurricane as it approached the southern coast of Texas early Friday. The National Hurricane Center in Miami, Fla., said Harvey is expected to make landfall late Friday or early Saturday and then track slowly inland through the weekend. Maximum sustained winds are near 110 miles per hour and total rain accumulations could range between 15 inches to as high as 35 inches.
The U.S. Gulf of Mexico is home to about 20 percent of the estimated total production in the nation. Anadarko Petroleum, which operates 10 installations in the region, evacuated staff and closed down operations at four of those earlier this week. British energy company BP, which operates four offshore production centers, said its operations weren't impacted by the storm.
The onshore region is concentrated with refineries and the storm could have lasting impacts on the delivery of petroleum products. Valero Energy Corp., which has headquarters in Texas, said only those employees with a direct role in hurricane preparations are on duty.
"As the storm has now become a possible Category 3 hurricane and its projected landfall continues to be along the coast near Corpus Christi, Texas, Valero is in the process of shutting down its Corpus Christi and Three Rivers refineries in a safe, controlled manner," the company said in an emailed statement.
So far, retail gasoline prices are holding relatively stable. With at least five refineries in the region shut down, prices at the pump in the area could climb about 10 cents per gallon, or about 4.5 percent based on current prices, according to GasBuddy.
Patrick DeHaan, a senior petroleum analyst with GasBuddy, told UPI early Friday the national average price could jump as much as 15 cents, or 6 percent, depending on the extent of Harvey's impact.
"Major flooding will be the key issue and how long refineries remain shut down will have an impact on gasoline prices," he said. "The danger zone is if refiners are shut more than two weeks."
The Mid-Atlantic and surrounding regions would have the most dramatic and most immediate response, with prices spiking as much as 20 cents per gallon. Starting next week, the Great Lakes states, already the most volatile market in the country, could see gasoline prices jump by as much as 15 cents.
"The situation is very fluid so any estimates may change," DeHaan stressed