The global head of energy analysis for Oil Price Information Service, Tom Kloza says that, "This is going to be a substantial "ouch" for consumers".
"And as the nation prepares for the Labor Day weekend, motorists are bracing for higher prices at the pump, conceivably longer lines, and spot outages, especially if a hoarding mentality motivates consumers to transfer tank farm inventories to the gas tanks of their cars".
US crude oil futures settled higher on Monday as the refinery activity slowly resumed on the Gulf Coast. "The good news consumers will see relief from the gas price spike towards the end of this month".
Once the rain stops and refineries start to come back online, you will likely see an increase in demand for crude oil occur before you see an increase in the supply of gasoline. Gasoline October futures fell 2.8% on the same day.
October gasoline futures dropped 5.29 cents to $1.6950 a gallon.More news: Coastal Storm Bringing Rain & Wind to NC Coast
United States crude stockpiles likely expanded by 2.5 million barrels last week, while gasoline inventories dropped by 5 million barrels, which would be the biggest loss by volume since March, according to a Bloomberg survey before government data to be released on Thursday. The storm's impacts sent gasoline prices soaring but also crimped demand for crude.
However, next week's data will likely show a decrease in demand as large swaths of the Gulf Coast region and interior USA reduce demand in the wake of Hurricane Harvey. Worldwide benchmark Brent crude was trading at $52.75, per barrel, down by 0.21 per cent when the markets closed on Friday.
Damage by Harvey to the oil infrastructure in the Gulf Coast appeared less extensive than some had feared.
Brent today was said to have responded to events in North Korea. But a big buildup in crude stocks could do more to crystallize the problem for oil traders than the data on refinery outages have done up to this point.
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. The storm also disrupted some oil producing and refining facilities, sending gasoline prices surging. At its peak, Harvey shuttered 27% of US processing capacity.