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Capping The Oil Price Rally

Capping The Oil Price Rally

OPEC’s recent meeting in Baku…

U.S. Taps 4.5 Million Barrels Of Oil From Strategic Reserve After Harvey

USA

Approximately 4.5 million barrels of oil have been released from the Strategic Petroleum Reserve (SPR) in response to Hurricane Harvey’s effect on national gasoline availability. 

Three million barrels of the reserves will reach Marathon Petroleum Corp and another 500,000 bpd will reach Valero Energy Corp. from the reserves at the Bayou Choctaw site, according to Bloomberg. Another million barrels had already been approved for shipment, the report said.

"Without trying to affect the market place, we are trying to be as stable as we can, making sure folks can, in fact, have access to gasoline,” Energy Secretary Rick Perry told Bloomberg. For almost two weeks, gasoline prices have experienced upward pressure due to the hurricane’s effects on oil production and refinery output.

Hurricane Harvey has knocked out major refineries along the Gulf Coast, with an estimated 3.04 million barrels per day of refining capacity was still offline in Texas. Valero’s refinery in Corpus Christi and Three Rivers are now back online, but Platts suggests they are operating at half capacity. Two days ago, Valero Energy had stopped supplying gasoline stations that were not specifically Valero-Branded, according to Bloomberg.

Related: Texas Shale Hit Hard By Hurricane Harvey

Marathon Petroleum Corp., the other recipient of the SPR, restarted its Galveston Bay refinery yesterday.

Retail gas prices continue to climb, partially because of the shortage, partially because of the self-fulfilling prophecy of the shortage, and partially because of the Labor Day weekend. Nationwide, the average price for a gallon of gasoline is $2.52—the highest price of 2017, according to AAA. States experiencing the highest gasoline price-hikes include South Caroline, Delaware, and Kentucky.

By Zainab Calcuttawala for Oilprice.com

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