U.S. gasoline prices tumble as refineries, pipelines resume activity after Harvey

Benchmark U.S. gasoline prices slump to pre-Hurricane Harvey levels as oil refineries and pipelines in the U.S. Gulf Coast slowly resumed activity, easing supply concerns, but Canadian motorists weren't seeing any immediate relief at the pumps.

Gulf Coast oil infrastructure damage appears less extensive than some had feared

Derrick Washington fills up in Dallas on Friday after waiting in line for gasoline at the Fuel City service station in the aftermath of Hurricane Harvey. Gasoline futures traded lower on Monday. (Brandon Wade/Reuters)

U.S. gasoline prices fell on Monday as the nation's oil heartland continued to claw its way back from the devastation wrought by Storm Harvey, with shipping channels, pipelines and refineries restarting operations.

Port operations across the U.S. Gulf Coast oil and gas hub were resuming, although many still had restrictions on vessel draft, according to U.S. Coast Guard updates. Key fuel pipelines planned to restart as more of the oil refineries that feed them ramped up production.

Benchmark U.S. gasoline futures fell by more than 3 per cent, and retail prices edged up by only 1 cent a gallon on Monday, according to motorists advocacy group AAA, after climbing by more than 20 cents in the wake of Harvey, which was downgraded to a storm after making landfall as a hurricane.

Canadian motorists weren't seeing any immediate relief at the pumps on Monday.

According to, the average national price at 10:20 ET was $1.217 per litre, down slightly from Sunday's average price of $1.22 per litre. The price aggregator website said Monday's average is up 13.4 cent a litre from last week's average.

Additionally, average prices in some provinces, including British Columbia, Manitoba, Ontario and Quebec, were still higher on Monday than they were on Sunday. 

Harvey dumped as much as 127 centimetres of rain over Texas and Louisiana, forcing officials to close or restrict operations at ports from Corpus Christi, Texas, to Lake Charles, Louisiana. It also forced the closure of nearly a quarter of the nation's oil refining capacity.

Alberto Hernandez, a watch supervisor at the U.S. Coast Guard, said on Monday there were ships exiting and entering the Houston Ship Channel, which links the Port of Houston, the busiest petrochemical port, to the Gulf of Mexico.

The channel is open to just past Exxon Mobil Corp's Baytown refinery to vessels up to a 12-metre draft, while salvage efforts continued to remove a sunken drydock in an industrial portion, officials said.

Hernandez said there was no time frame for removing the drydock debris from the main stem of the channel, which is key to moving crude oil to refineries.

Colonel Lars Zetterstrom, Galveston District commander of the U.S. Army Corps of Engineers, said 25 of the 28 ports in Texas were operational as of Monday, some with restrictions. Only Port Arthur, Beaumont and Port Orange along the Sabine-Neches Waterway remained fully closed.

Restarts of pipelines that move fuel from refineries to the rest of the nation also were alleviating worries about shortages.

Colonial Pipeline Co, which transports more than 3 million barrels per day (bpd) of gasoline, diesel and jet fuel from Gulf Coast refineries to Northeastern markets, said the restart on Monday afternoon of its the main distillate line between Houston and Hebert, Texas, would take "a few hours." It plans the same restart process for the gasoline line between those points on Tuesday.

The Explorer Pipeline planned to reopen its 24-inch (61 cm) Oklahoma-to-Midwest fuel pipeline on Monday after reopening its 28-inch (71 cm) Texas-to-Oklahoma line on Sunday.

ExxonMobil said on Monday its pipeline division was initiating supply of gasoline and other fuels to the Houston area after making "significant progress" on restarting the lines.

Fuels-producing refineries also were ramping up output. Valero Energy Corp was restarting multiple units at its 335,000 bpd Port Arthur, Texas, refinery on Monday, according to regulatory filings, and the company said its 293,000 bpd Corpus Christi and 225,000-bpd Texas City refineries were back to pre-storm levels of production.

In this Aug. 30, 2017, photo, ExxonMobil's refinery in Baytown, Texas, is pictured following Hurricane Harvey. (Tom Fox, The Dallas Morning News/Associated Press)

ExxonMobil's 560,500-bpd Baytown, Texas, refinery, the nation's second-largest, began restarting during the weekend, while Phillips 66 said it was resuming operations at its 247,000-bpd Sweeny refinery.

Crude oil operations were also edging back to normal. The number of U.S. Gulf oil and gas production platforms with evacuated personnel after Hurricane Harvey dropped to 14 on Monday, down from 30, according to the U.S. Bureau of Safety and Environmental Enforcement.

Still, the bureau said the total of U.S. Gulf of Mexico oil production closed increased to roughly 6.94 per cent, or 121,484 bpd, up from 5.5 per cent on Sunday. It did not give a reason for the increase.

with files from CBC News