Roger W. Gilroy |
The U.S. average retail price of diesel soared 15.3 cents to $2.758 a gallon as demand spiked while refineries in the Houston area reported they were ramping up and restarting some operations, but conditions remained difficult due to stubborn flood waters after Hurricane Harvey, experts said.
It was diesel’s highest price since July 20, 2015, when it was $2.782. The 15.3-cent surge was the highest one-week spike in six-and-a-half years, dating to March 2011.
The U.S. average price for regular gasoline surged 28 cents to $2.679 a gallon. The cost is 45.6 cents more than it was a year ago, DOE’s Energy Information Administration said.
Weekly gasoline prices rose in all regions, EIA said.
Diesel costs 35.1 cents more than it did a year ago, when it was $2.407 a gallon.
The ripple in diesel price increases was felt across the country.
Prices for trucking’s main fuel climbed by more than 10 cents in all regions except for the Rocky Mountain area, where it fell 8.1 cents.
“Suffice it to say, [diesel] supply is going to be pretty tight through much of Texas and up into the Mid-Atlantic for the short term here,” Denton Cinquegrana, chief oil analyst for the Oil Price Information Service, told Transport Topics.
Meanwhile, the record rainfall had yet to drain away fully a few days after Harvey moved on.
“There’s just water on every road. We have a couple of our [truck terminal] operations that are operating in the Houston area, but the one in the Beaumont area is not operating now,” Bill Marchbank, chief operating officer for Trimac Transportation, told TT on Sept. 1 during a nighttime call from Houston. “A lot of the people in Beaumont don’t have power, nobody has water and such.”
Trimac, a tank truck and bulk commodities carrier, operates about 300 tractors and 700 trailers to serve Beaumont, Houston and San Antonio.
Trimac Group ranks No. 45 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. The company is based in Calgary, Alberta.
“We saw probably 50 ambulances going into Beaumont [on Aug. 31]. We saw a ton of Border Patrol vehicle going into Beaumont,” he said. “So, I would imagine when you have a high concentration of emergency vehicles, they are probably going to take most of the fuel that is there away.”
Valero Energy Corp. said Sept. 4 its Corpus Christi and Texas City facilities are at pre-hurricane rates and its Three Rivers operation continues to ramp up operations. Its Houston production will increase as transportation and logistics infrastructure becomes more available.
Hundreds of employees have seen their roofs torn away and need help with food, lodging and other needs, according to Valero.
“We have seen a fair amount of refinery capacity return online, but there still is a significant amount that is still offline between the Houston-Beaumont-Port Arthur region,” Andy Lipow, president of Lipow Oil Associates in Houston, told Bloomberg News. “The market is pricing in a rather quick recovery in the Houston area, but it might still be several weeks for the Houston area refiners to return to full production.”
Also, oil prices still remained below $50 a barrel despite increasing from a week earlier.
West Texas Intermediate crude futures on the New York Mercantile Exchange closed at $48.66 on Sept. 4, compared with $46.57 on Aug. 28.