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Gas prices rise as Hurricane Harvey approaches one-third of US refining capacity

Gas prices rise as Hurricane Harvey approaches one-third of US refining capacity
Posted at 5:27 PM, Aug 24, 2017
and last updated 2017-08-24 14:15:48-04

(RNN) - As it picks up steam in the Gulf of Mexico, Hurricane Harvey threatens roughly one-third of the U.S. oil refining capacity.

The National Hurricane Center expects the hurricane will become a Category 3 storm with winds up to 125 mph. It could hang over the Texas Gulf Coast near Corpus Christi for as many as three days causing dangerous flooding and storm surge.

According to CNBC, the hurricane has the attention of the energy industry. Because traders feared demand would drop, oil prices fell 2 percent as the storm loomed in the Gulf.

Meanwhile, gasoline future prices rose by 4 percent Thursday afternoon in anticipation of the storm.

Brown dots represent oil wells. Blue dots represent natural gas wells. Black barrels represent oil refineries. Blue flames represent natural gas processing plants. (Source: EIA.gov)

Andrew Lipow, president of Lipow Oil Associates, told CNBC a Category 3 hurricane could shut down refining operations for as long as three weeks.

Two refineries have already shut down in Corpus Christi to prepare for the hurricane.

Shipping channels in Texas could also be affected by the storm surge.

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