When you see gas prices go up this week, you can blame it on Hurricane Harvey.
While prices currently sit in the $1.06 range in Sault Ste. Marie, some gas stations have already jumped their prices to $1.16 as of Monday morning and prices could go higher by the end of the week depending on the devastation in Texas.
Gasoline prices are set to rise in Canada as tropical storm Harvey churns through the oil refinery district of Texas but the cost to consumers will likely be restricted to a few pennies per litre.
GasBuddy senior petroleum analyst Dan McTeague says it now seems unlikely that Canadian gasoline prices will jump by 12 cents per litre as they did in 2008 after Ike was the last hurricane to roar ashore in Texas.
U.S. gasoline future prices spiked Monday morning as flooding temporarily shut down Houston area refineries but Canadian prices shown on the GasBuddy.com website were little changed.
McTeague says it appears most gas traders are taking a wait-and-see approach before bidding prices higher. He predicts that Canadian gasoline could rise by an average of two to four cents per litre by Thursday or Friday.
Meanwhile, Canadian companies with assets in the Gulf Coast area joined their American counterparts in closing offices and hunkering down to wait out the storm.
Calgary-based Enbridge (TSX:ENB), which bought Houston-headquartered Spectra Energy earlier this year, says it has closed its Houston offices and has removed all but essential staff from its natural gas gathering and processing facilities in the Gulf of Mexico.
S&P Global Platts estimates that Harvey has affected about 2.2 million barrels per day of refining capacity in the United States, including ExxonMobil, Shell and Phillips 66 operations that began shutting down Sunday.
With the supply of refined products expected to be down, the October contract for gasoline was trading this morning at its highest in more than six months, after rising about three per cent since Friday.
The less heavily traded September contract was up seven cents at US$1.73 per U.S. gallon, according to the CME Group futures market.
Colin Cieszynski of CMC Markets notes that the spike in gasoline prices could be short-lived.
BMO economist Sal Guatieri wrote in a note to clients that “the impact on (third-quarter) economic growth will depend on the length of the shutdowns and damage to the energy infrastructure in the region.”
-with files from Canadian Press