Hurricane Florence had little effect on gasoline prices because the storm didn’t go near refineries or other energy infrastructure. The Carolinas and surrounding states also had an abundant supply of gasoline, analysts report, explaining the lack of a spike in prices.
AAA reports that national prices remained steady at $2.85 on the week.
Gasoline supplies in the mid-Atlantic and Northeast topped 66.7 million barrels, the highest level since March 2016. But actually delivering gasoline to gas stations in the hardest hit areas of North Carolina could be a short-term challenge. During the build-up to the hurricane, many drivers topped off their tanks, leaving some stations empty.
“Gasoline stocks in the hurricane-impacted area are healthy, but delivery of gasoline will be an impediment to meeting demand in coastal areas this week,” Jeanette Casselano, a AAA spokesperson. “As power is restored, water recedes and roads open up, we will have a better idea of how quickly fuel deliveries can be made to gas stations in the area.”
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Overall, gasoline prices rose 3 cents in North Carolina and 1 cent in Virginia.
Oil and gas execs want no part in trade war
The escalating trade war between China and the United States reached a boiling point Tuesday with both sides trading barbs and raising the stakes. China has indicated that U.S. natural gas could be a target for tariffs.
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It’s a battle oil and gas executives want no part of.
“One of the things that could be damaging for the LNG industry in the U.S. is the taxes that could be levied on them by China and others,” Saad Sherida Al-Kaabi, CEO of Qatar Petroleum, the world’s largest LNG exporter, told CNBC. “I think it needs to be looked at carefully because I don’t think it’s to the benefit of the oil and gas industry to have politics and taxation enter into this.”
China is the second largest importer of LNG and 15 percent of all U.S. LNG exports go to China. If China places tariffs on LNG, it would be a serious blow to U.S. producers.
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Qatar could actually benefit if tariffs are placed on U.S. gas but Al-Kaabi said it would have an overall negative effect on the industry.
“It could serve Qatar to be more competitive, in comparison with the U.S., when some of the countries put taxes on U.S. LNG — but I don’t think long-term that it’s good for the market to have politics and to have taxation on a very important basic requirement for humanity, which is energy,” Al-Kaabi said.
The trade war could be “economically disruptive,” according to the International Energy Agency.
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“Without additional investments into American liquefied natural gas [LNG] projects, the American gas industry will have to keep gas on the ground, which would be a waste of capital,” Laszlo Varro, chief economist at IEA, told CNBC. “If there are no export projects, then American gas prices will have to go down to a very low level to shut production down.”
World could look to Iraq for oil
Iraq could start supplying crude oil to the global market “immediately” if Iran’s crude oil is cut off by U.S. sanctions. Iraq produced 4.68 million barrels in August, a new record for the country. And there’s potential to pump even more.
“Some increases could be done immediately,” said Alaa al-Yassiri, director of Iraq’s State Oil Marketing Organization.
Iraq, a founding member of the Organization of the Petroleum Exporting Countries, is adding to its export capacity to meet the world’s demand. Current capacity is at 3.7 million barrels per day but there are several pipeline and infrastructure projects in the works.
The sanctions against Iran are expected to go into effect in November.