Oil in Global Economy Series: Gasoline price moderates after refineries restart in Texas

Before expiry, the September contract of the U.S. gasoline reached as high as $2.17 per gallon, while cash price reportedly reached $2.5 per gallon in places, while some place didn’t have any access to gasoline in the wake of the disaster caused by Hurricane Harvey, the worst storm to hit the United States in more than five decades.

However, the futures market indicate that the situation is easing somewhat as some refineries have restarted operation and the refinery outage declined from 4.9 million barrels per day to 3 million barrels per day. In addition to that, the U.S. Department of Energy has released some 4.5 million barrels of crude oil from Strategic Petroleum Reserve (SPR) to some crude starved refineries that began operating again. After declining more than 18 percent during contract shift, the gasoline price for October delivery has declined by more than 3 percent and is currently trading at 1.69 per gallon.  Crude is also recovering after a steady decline over Harvey. WTI is currently trading at $47.4 per barrel and Brent at $5 per barrel premium to WTI.