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Bridging The Gap
US petrol prices rise as key pipeline shut
  Thursday 31 August, 2017
US petrol prices rise as key pipeline shut

US petrol prices have risen after a key network of pipelines was shut in the wake of Hurricane Harvey, sparking fears of a squeeze on fuel supplies to major US cities.

The hurricane has already forced the closure of nearly a quarter of US oil refining capacity.

Colonial Pipeline said it was closing its pipelines delivering diesel, petrol and aviation fuel along the East Coast.

It later said the line east of Lake Charles, Louisiana, remained open.

However, Colonial says "deliveries will be intermittent and dependent on terminal and refinery supply". It said it would be able to return to service from Houston on Sunday.

European traders are scrambling to provide additional supplies.

At least 33 people have been killed in eastern Texas since the storm hit. The US National Weather Service has now downgraded it to a tropical depression.

But consequences of the storm are still being felt in Texas, with reports on Thursday of black smoke issuing from a damaged chemical plant.

There are fears that chemicals there could combust, causing explosions.

Heavy rainfall is expected from Louisiana to Kentucky over the next three days, and flood warnings remain in effect for south-east Texas and parts of south-west Louisiana.
Fuel supply crunch

US fuel prices have risen by more than 10 cents a gallon compared with a week ago, to nearly $2.45 on average nationwide, according to the American Automobile Association, amid reports that some East Coast refineries were running out of petrol.

The threat of a fuel supply crunch has grown as key infrastructure is paralysed by the storm - Colonial's announcement indicates the knock-on effects are growing.

The firm's network of pipelines is the country's largest supply system, taking refined fuel from the Gulf of Mexico to consumers in major US cities including New York, Atlanta and Washington DC.

Colonial had issued a statement on Wednesday announcing its diesel and aviation fuel pipeline was closing immediately and that its petrol (gasoline) pipeline would be closed from Thursday because of outages at pumping points and a lack of supply from refiners.

Of the 26 refineries that connect to the Colonial system, 13 are located between Houston and Lake Charles, it said.

Colonial, which in normal times supplies more than three million barrels of fuel a day, was the second major pipeline network to announce it was closing. The Explorer Pipeline, which has a much smaller capacity of 660,000 barrels a day, also said on Wednesday it was shutting down its supply line which runs from Houston to Tulsa, Oklahoma.

Source: http://www.bbc.com/news/business-41107007

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