• 59°

Ike already making economic impact

Hurricane Ike makes economic landfallBy JOHN PORRETTOAP Business WriterHOUSTON (AP) ó Hurricane Ike may still be in the Gulf of Mexico, but its economic impact has already made landfall, sending wholesale gasoline prices soaring Friday and straining the nation’s fuel supply chain.
Wholesale gasoline prices on the Gulf Coast moved even further into uncharted territory to around $4.85 a gallon on fears of vast fuel shortages as the hurricane honed in on the mass of refineries that line the upper Texas coast. The region accounts for about one-fifth of the nation’s petroleum refining capacity.
At least eight refineries had shut down or were powering down as Ike prepared to strike.
Gas supply disruptions were being felt outside Texas, where Ike is expected to make landfall in the next 24 hours. Arkansas Gov. Mike Beebe declared a state of emergency and said he expected temporary increases in gas prices over the next few days as pipelines into the state are shut down.
Gulf Coast wholesale gasoline jumped substantially from Tuesday, when a gallon cost just $3, said Ben Brockwell, director of data, pricing and information services for the Oil Price Information Service in Wall, N.J.
“The path of the storm has put the entire supply chain under stress from the refinery level all the way to the retail station level,” Brockwell said. “Hopefully it’s a temporary phenomenon, but we won’t know until next week.”
The spike will almost certainly lead to high pump prices for consumers across broad swaths of the country, as the gasoline makes it way from the wholesale market to retailers.
For now, pump prices are holding fairly steady. The average U.S. retail price for gasoline edged up less than a penny overnight to $3.675 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. Meanwhile, October gasoline futures climbed 6.52 cents to $2.8140 a gallon on the New York Mercantile Exchange.
The Texas Attorney General’s Office said Friday it had received about two dozen complaints of price gouging at gasoline stations, but nothing excessive as yet.
“We haven’t seen anything egregious, but we’re watching,” said spokesman Tom Kelley.
On Friday, major refineries shuttered operations in preparation for a storm surge.
Valero Energy Corp., North America’s largest refiner, was shutting down three of its six facilities on the Texas coast ó those in Port Arthur, Texas City and Houston. But the company said the other three, including two in Corpus Christi, were operating at planned rates.
Spokesman Bill Day said 64 of Valero’s 193 company-owned stores in the region were closed because of evacuations. Those that remain open were being supplied with gasoline from refineries in other areas, particularly Corpus Christi. That will continue after Ike passes, Day said.
“As soon as it’s safe, we’ll get supplies into that area as soon as possible,” he said.
Still, there was concern that the refinery shut-ins may last for days.
A North Carolina-based convenience store chain asked customers in most of its 11-state territory to limit gasoline purchases to 10 gallons Friday.
Pete Sodini, CEO of the Sanford-based Pantry convenience store chain, said his company dropped the 10-gallon request in Florida and other areas where stations were supplied by ship. He said supplies inland where stations are supplied from two major pipelines could be a problem as the storm wears on so the request stands in those areas.
Sodini emphasized the request is just that, similar to one the 11-state chain made during Hurricanes Katrina and Rita to try to slow down panic buying.
“We are not going to try to take the keys away from them,” he said. “It really comes down to what’s the inventory status by supplier, state by state.”
There was a run on gasoline in Tennessee fueled by speculation about Ike’s impact, according to AAA East Tennessee spokesman Don Lindsey.
Some stations in East Tennessee were overrun with customers and ran out of the cheapest unleaded gas, Lindsey said.
In Arkansas, Beebe said he made the emergency declaration to help the attorney general’s office pursue anyone who participates in price-gouging.
“We’ve dealt with emergencies before when severe weather has impacted fuel prices in Arkansas and throughout the region,” Beebe said. “This situation is unique with the interruption of pipeline service, and we want to do everything we can to make sure that any price gouging that results can be dealt with swiftly and strongly by the Attorney General.”
In Houston, gas prices rose 4.1 cents from Thursday to $3.496 a gallon on Friday, according to auto club AAA.
Statewide, the price of gas on Friday was $3.546, according to AAA.
Despite rising gasoline prices, the price for a barrel of crude dropped below $100, albeit briefly, for the first time since April, suggesting investors believe a global economic slowdown will tamp down supply for some time.
óóó
AP Business Writer Madlen Read in New York, AP writer Andrew DeMillo in Little Rock, Ark., and AP Business Writer Mark Williams in Houston, contributed to this report.

Comments

Comments closed.

Local

‘Meet the need’: Rowan County Health Department looks to add to vaccination options

Local

Seaford is first woman in county hired for town manager position since the ’90s

Local

Colonial Spring Frolic makes a comeback to kick off museum’s year

Local

Concord City Council wants to name bridge for fallen officer, Rowan native

Education

RSS administration will recommend selling Faith Elementary property to charter school

Business

Inspired by advice from father-in-law, Angela Mills launches her own business in memory of him

Local

Rowan County Democrats re-elect leaders, pass resolutions

Local

Baseball: Memories come alive in Ferebee book

Local

During Child Abuse Prevention Month, professionals reflect on detecting abuse in a virtual world

Business

Biz Roundup: Small Business Center announces spring slate of workshop for business owners

Clubs

Kiwanis Pancake Festival starts Friday

Local

Rowan fire marshal seeks to clear up confusion, worry caused by solicitation letter

Education

Fun every day: Fifth anniversary for Yadkin Path Montessori School

Nation/World

Charles: Royal family ‘deeply grateful’ for support for Philip

News

North Carolina sites to resume J&J vaccines after CDC review

News

Cooper OKs bill offering K-12 students summer school option

High School

High school football: Playoff time means get ready for ‘big-boy football’

High School

High school football: Hornets overpower South to secure playoff spot

Crime

Jeffrey MacDonald won’t be released despite deteriorating health

Business

Amazon warehouse workers reject union in Alabama

Nation/World

Ex-NFL player’s brain to be probed for trauma-related harm after Rock Hill shootings

Education

Duke University to require COVID vaccinations for fall term

Education

Cooper OKs bill offering K-12 students summer school option

High School

High school football: Record night for Pinckney as East cruises; Carson wins thriller in OT