Commodities expert: Unclear how long Harvey will affect gas prices
Gas prices are going up across the country after historic amounts of rainfall and flooding from Hurricane Harvey wreaked havoc on Texas and its oil refineries. Prices have jumped almost 20 cents since the storm made landfall one week ago; the national average now sits at $2.52 – the highest average price in at least two years.
Drivers in Dallas waited in line Thursday to fill up their tanks, worried that refinery and pipeline shutdowns along the Gulf Coast would cause a gas shortage.
Helima Croft, global head of commodity strategy for RBC Capital Markets, joined "CBS This Morning" to discuss what kind of impact Harvey could continue to have on prices in the U.S. and abroad.
"We simply don't know when we'll get the refineries back up and running. We currently have 10 refineries down. That's 16 percent of all U.S. refining capacity," Croft said. "We're really going to need to sort of play a bit of a waiting game to see when we can get gas prices back to a more normal level."
Colonial Pipeline announced Thursday that it would be shutting down a critical piece of infrastructure responsible for providing gas to the East Coast.
"One out of every eight barrels that people consume comes through the Colonial Pipeline. It is a major transit route for gasoline, for jet fuel, for distillates. It supplies the East Coast of the United States so when we have problems on that pipeline we see higher gas prices here," Croft said.
With the Labor Day weekend ahead, many are wondering whether they will be waiting in long lines for gas. There are some steps the government can take to help with the situation.
"After the oil embargo in the 70s we created a strategic petroleum reserve that we can tap in emergency situations. We actually tapped the strategic petroleum reserve yesterday – a million barrels for refineries in Louisiana," Croft said.
Croft said the U.S. government has other tools it can use to get supplies to different parts of the country and ease any supply problems.
"We now export six million barrels of crude and refined product. So you have global markets dependent on U.S. supplies. Mexico, half of their gasoline comes from the United States. So, we're starting to see shortages and problems outside the United States. It's a global problem not just a local problem."