Gas prices are spiking after the biggest US refinery shuts down

Gasoline prices were surging again Thursday amid refinery closings in Texas caused by Hurricane Harvey.

Gas futures for September delivery were up 12% to $2.11 a gallon at 10:40 a.m. ET. In their eighth straight day of gains, futures are on their longest rising streak in four years, according to Bloomberg. Futures for October delivery also rallied.

Prices at the pump are also higher. The AAA average national gas price at 3:43 a.m. ET on Thursday was $2.449 a gallon, up from an average price of $2.348 a gallon last week.

Investing.comMotiva's refinery in Port Arthur, Texas, which is the largest refinery in the US, shut down Wednesday as floodwater rose. And on Thursday, Colonial Pipeline, which owns the largest pipeline for gas distribution in the US, had planned to shut down its gasoline line because Gulf Coast refiners were unable to process crude oil, Bloomberg reported. "Deliveries will be intermittent and dependent on terminal and refinery supply," the company said in an update.

To help with the gasoline shortage, the Energy Department on Thursday said it was releasing 500,000 barrels of oil from its Strategic Petroleum Reserve that holds supplies for emergencies. The agency said it loaned the barrels of both sweet and sour crude to a Phillips 66 refinery in Lake Charles, Louisiana, which has not been affected by Hurricane Harvey.

The Fort Worth Star-Telegram reported that some gas stations in the area may run out of supplies during the Labor Day weekend. Gas stations on the East Coast could also experience shortages, Bloomberg reported, and this could send gas prices even higher.

Crude-oil prices rose in a "knee jerk reaction" tracking gasoline following news that Exxon Mobil was shutting down its Beaumont, Texas, refinery for up to two weeks, according to Jesse Cohen of Investing.com. The closing of the Motiva refinery and news that the storm Irma had strengthened to a hurricane and could hit Gulf production provided another boost, Cohen said.

The front-month West Texas Intermediate crude-oil contract gained 2.5% to $47.09 a barrel but remained on track for its fifth straight weekly decline.Markets Insider

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