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Hurricane Harvey gas price spike won't last long in Colorado, experts say

August 31, 2017 Updated: August 31, 2017 at 2:34 pm
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A fuel pump at a Marathon Petroleum Speedway gas station in Huntington, West Virginia, on Oct. 18, 2016. (MUST CREDIT: Bloomberg photo by Luke Sharrett)

Gasoline prices in Colorado Springs have been ticking upward since Hurricane Harvey hit the Texas coast, but the hikes aren't expected to last.

Colorado Springs' average price for a gallon of regular gas on Thursday was $2.37, 5 cents higher than Wednesday and 10 cents higher than last week, according to AAA Colorado.

"It's a unique year, and the hurricane is hitting in a unique location, since Houston is the epicenter of U.S. refining," said Allison Mac, a petroleum analyst with GasBuddy. "We're seeing everyone in the nation being affected by gas prices."

AAA Colorado said the price increases are pretty much what was predicted after the Category 4 hurricane made landfall at Rockport last Friday, followed by historic rainfall that totaled more than 4 feet in Houston. The flooding that inundated Houston shut down 15 percent of the U.S. oil market's refining capacity.

Since Colorado gets most of its gas supply from South Dakota and Wyoming, the impact on state residents should be short-lived, said Skyler McKinley, spokesman for AAA Colorado.

"Prices are increasing day to day. It's not meaningless, but we should see things stabilize in the next couple weeks," said McKinley.

Mac agreed, adding that a drop in the oil supply, not refinery operations, would have a more long-lasting effect.

"This is not like a jump in oil prices, it's at the refinery level. It's economics 101 - once the refineries are back up and running and supply bounces back, the prices should balance again," Mac said.

Scott Prestidge, spokesman for the Colorado Oil & Gas Association, noted that the refineries could take some time to restart operations and that the impacts from prolonged closure could affect Colorado.

"While our market is not directly dependent upon Gulf Coast infrastructure, the longer that important infrastructure remains off-line, the broader those impacts will be across all parts of the country," he said.

Colorado Springs' prices are still below national and state averages. On Thursday, AAA reported the national average for regular gas was $2.44 a gallon and the state average was $2.42 a gallon, an increase of 4 cents yesterday and 9 cents from a week ago.

Other cities that are reliant on refineries on the Texas and Louisiana coasts have experienced drastic gas price increases. Springfield, Mo., for example, saw a 20-cent per gallon increase between Wednesday night and Thursday morning.

Historically, gas prices drop after Labor Day weekend, which marks the end of summer travel. At this time, gas stations also transition to winter-blend gasoline, a cheaper blend than the gas used in the summer.

"Labor Day is the last major driving holiday, so things will pivot downward after this weekend, as they historically have," McKinley said.

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