US gasoline prices surge as Harvey keeps refiners shut

It is getting harder to fill gas tanks in parts of Texas where some stations are out of fuel and pump costs are spiking. (AP)
Updated 01 September 2017

US gasoline prices surge as Harvey keeps refiners shut

HOUSTON: Retail US gasoline prices hit two-year highs and global shipping routes were scrambled as the nation’s largest refiners remained shut on Friday, even as Storm Harvey lost strength.
Major fuel pipelines feeding the US Northeast and Midwest were either closed or severely curtailed, prompting shortages in some areas and dramatic spikes in wholesale prices.
The storm, which began as a hurricane a week ago, has roiled global fuel markets, and tankers carrying millions of barrels of fuel have been rerouted to the Americas to avert shortages. European refining margins hit a two-year high amid the surge in exports.
Indeed, the effects of the storm will continue for several weeks, if not months, after Harvey hammered the Gulf Coast for days and brought floods that buried Houston and the surrounding area in several feet of water. It knocked out about 4.4 million barrels of daily refining capacity, slightly more than Japan uses daily, and the signs of restarts were tentative.
The nation’s largest refiner, Motiva’s Port Arthur facility, which can handle 600,000 barrels of crude daily, will be shut for at least two weeks, according to sources familiar with plant operations.
In Corpus Christi, where Harvey first made landfall, refiners Citgo Petroleum, Flint Hills Resources and Valero Energy, were moving to restart their plants, along with the nearby Valero Three Rivers refinery, according to sources.
Benchmark US gasoline prices have surged more than 15 percent since the storm began, but in trading Friday, the contract for October delivery lost 1 percent, the first decline in five days. September’s contract had risen by 25 percent, but stopped trading Thursday.
US crude prices continued to slump along with demand, with the futures contract falling 0.4 percent to $47.02 a barrel.
The national average for a regular gallon of gasoline rose to $2.519 as of Friday morning, according to motorists advocacy group AAA, with even gaudier increases in the US Southeast, which relies heavily on Gulf supplies.
South Carolina, for instance, has seen prices rise nearly 30 cents, and prices were up nearly 20 cents in Texas, where fuel shortages were already evident.
Suppliers in the Chicago area were taking steps to prevent shortages, and banking on hope.
Dave Luchtman, owner and president of Lucky’s Energy Service, a small distributor in Chicago, has rented two storage trailers that hold 8,000 gallons each, expected to be delivered Friday.
“So I have a little lifeline,” Luchtman said.
Refineries so far have not given any indication that there are fuel shortages, said Mario Orlandi, an operations manager at Olson Service, which supplies diesel and gasoline to the Chicago area.
“Cross our fingers, keep our tanks full,” Orlandi said.
The global impact of the storm was being felt in Venezuela, where financially strapped state-run PDVSA is facing the possibility that scheduled deliveries — tankers floating offshore for weeks due to non-payment — will make their way to other Latin American destinations.
At least two cargoes scheduled to deliver to Venezuela currently in the port of Curacao are now expected to be delivered to Ecuador.
Mexico, Brazil, Colombia and other countries want to tap some of the 7 million barrels of fuel sitting in the Caribbean sea, according to three traders and shippers.
European and Asian traders have diverted millions of barrels of fuel to the Americas. That included a rare opportunity for exports of jet fuel from Europe to the United States, reversing the usual flow of shipments.
Supplies from distant markets may not arrive soon enough to avert a crunch after the Colonial Pipeline, the biggest US fuel system, said it would shut part of its main lines to the Northeast.
“We are going to have outages from Texas to Boston,” said one East Coast market source. The market is “way under-appreciating the magnitude of this.”
Several East Coast refineries have run out of gasoline for immediate delivery as they sent fuel elsewhere, and concerns over shortages ahead of the US Labor Day extended weekend were mounting.


‘Dubai will be my new Beirut,’ say grieving Lebanese workers

Updated 5 min 15 sec ago

‘Dubai will be my new Beirut,’ say grieving Lebanese workers

  • About 350,000 Lebanese now live and work in the six Gulf nations

DUBAI: Just days after the enormous blast that shattered Beirut, Ali Hammoud found himself looking down on the rubble from an airplane window, leaving behind his family and hometown.

Born and raised in Lebanon’s capital, the 30-year-old IT engineer finally decided to head for Dubai after the explosion destroyed his last hopes of ever seeing Beirut prosper.

“It’s not easy at all, but I had to finally leave. I feel I’ve betrayed the city I love to death, but there is nothing left for me there except depression,” Hammoud said after arriving in the Gulf emirate.

“Now I can start a professional career, live in peace and send money back to my family,” said Hammoud, who had spent a year looking in vain for work before the Aug. 4 disaster that left more than 170 people dead and compounded Lebanon’s financial crisis.

Like many of his compatriots longing for safety and stability, the young man has applied for a job in Dubai. He joins tens of thousands of Lebanese who helped build a glitzy city that reminds them of their parents’ tales of the glamor of old Beirut — but with glimmering skyscrapers instead of Ottoman-era and French colonial villas.

Last week’s explosion of a long-neglected stock of ammonium nitrate at Beirut’s port ripped through the vibrant coastal city known for its rich history as well as legendary nightlife and cuisine.

The fact that Lebanese officials had long tolerated a ticking time-bomb in the heart of the Mediterranean city has served as proof to many of the rot at the core of the state apparatus.

“My aim is to overcome the guilt of leaving,” said Hammoud. “Dubai will be my new Beirut.”

Long before the explosion, Lebanon was heading downhill fast. The country was mired in its worst economic crisis since the 1975-1990 civil war, with runaway inflation and bank capital controls fueling angry street protests.

Political life in the country has been dominated for three decades by former warlords who exchanged their military fatigues for suits.

Among Sunni Muslim, Christian and myriad other groups, the most powerful force is the Shiite Hezbollah movement.

After years of systematic corruption, unsolved assassination cases, wars with neighboring Israel, and lack of basic services, many Lebanese now see the country’s elite as fighting over the spoils. They are viewed as beholden to their personal and sectarian interests, rather than the good of the nation of 6 million.

“I can’t explain how frustrated I am. I had to leave my country years ago because of those warlords. They stole from us and now they kill us?” said Firas Rachid, a 31-year-old salesman who has lived in Dubai since 2016.

Beirut, once famous for top educational and medical establishments, has lost much of its pre-civil war identity and its reputation as an oasis of enlightenment.

Millions of Lebanese, from doctors to engineers, to teachers and other professions, have emigrated over the years, seeking a better life in the Gulf and beyond.

About 350,000 Lebanese now live and work in the six Gulf nations, more than 100,000 of them in the United Arab Emirates alone, mostly in Dubai.

“Why Dubai? We drive in lanes here, we don’t fear militiamen holding guns to our heads, we have basic services, and we get paid well,” said Rachid. “My parents always describe Beirut as a hub for the region in the ‘60s and ‘70s, but this is exactly what Dubai is now.”

In his book “My Story,” Dubai’s ruler Sheikh Mohammed Bin Rashid Al Maktoum recalls his first visit to Beirut, years before the civil war that brought the “Paris of the Middle East” to its knees.

“In the early 1960s, its streets were clean, neighborhoods beautiful, its markets modern. It was a source of inspiration for me. I had a dream for Dubai to become like Beirut some day,” he wrote.

Decades later, Dubai has become a magnet for millions of Arabs whose countries have been ravaged by poverty and conflict.

Jordanians, Palestinians, Moroccans and others have opted to build their future in the desert city.

It does not have the history or cultural heritage of their homelands, but for many it is a fair tradeoff for peace and financial security.

At a basketball game in Dubai last year between two Lebanese clubs with different sectarian ties, there was no violence, no sectarian chants, only the slogan: “Three, two one! We are one!“