The US Energy Information Administration (EIA) has confirmed that Hurricane Irma significantly disrupted gasoline markets in Florida in two significant ways. Firstly, it prompted increased demand, before disrupting the supply chain needed to deliver the fuel.
The evacuation of people in anticipation of Hurricane Irma led to higher demand for transportation fuels and logistical challenges in supplying fuel to Florida that began before the hurricane made landfall on 10 September 2017.
The state is almost entirely supplied by marine movements of petroleum products as there areno petroleum refineries in Florida or major pipelines connecting Florida to supply centres along the US Gulf Coast. As such, any threat of or actual disruption to supply sources and shipping routes, such as Hurricane Harvey, can affect gasoline markets.
The EIA notes that between 21 August and 28 August, when Hurricane Harvey made landfall in Texas, retail gasoline prices in Florida and Miami increased US$0.10/gal and US$0.05/gal.
As Hurricane Irma approached, shipping traffic was diverted and ports closed, stopping the flow of petroleum products into Florida. Because several supply options were partially disrupted, the increased demand for fuel resulted in a large draw on petroleum product inventories at product distribution terminals within the state.
Increased demand and falling inventories caused Florida and Miami gasoline prices to rise by US$0.40/gal and US$0.39/gal, respectively, between 28 August and 4 September 2017. Markets appeared to be anticipating a return to more normal conditions, and by 11 September state-wide average retail gasoline prices in Florida decreased one cent/gal from the prior week to us$2.69/gal.
Read the article online at: https://www.hydrocarbonengineering.com/refining/18092017/hurricanes-lead-to-higher-gasoline-prices-in-florida/