Drivers on the East Coast and in the Southeast could see a 10 cent or more jump in gasoline prices by this weekend, and possibly shortages at some gas stations, analysts said.
The now weeklong outage of Colonial Pipeline Co.'s gasoline pipeline, a major supplier of East Coast gasoline, has been pushing gasoline futures and New York Harbor spot prices higher.
New York spot prices were at $1.46 per barrel Friday, a jump of 11 cents in just two days, according to John Kilduff of Again Capital. RBOB gasoline futures for October were trading at $1.46 per gallon, up 2.2 percent on the day and more than 7 percent for the week.
That could push local prices up along the East Coast by the weekend, analysts said.
"I think certainly some of the unbranded stations will probably run out of gas," said Andy Lipow, president of Lipow Oil Associates. "I'm expecting that in the Carolinas, maybe some parts of Virginia and possibly some locations in Georgia."
"There will be sporadic outages, and then we'll catch up. At least on the East Coast we had more inventory around compared to last year. We're going to draw into that inventory of course and into the additional inventory that's been around," he said. "There will be some terminals that eventually run out of gasoline. The fact is when you lose a major pipeline that's supplying the Southeast and mid-Atlantic, as it was and was running at full capacity, it takes time for them to catch up."
"We really don't know exactly when Colonial is going to get started back," Lipow said. "By Sunday, you might see some brown paper bags on gas pumps."
Some marketers are on allocation, and that could affect supplies to some gas stations. Areas most affected will be Atlanta, the Carolinas, and Virginia. Probably little effect in New York and New England, he said.
Lipow said the immediate price impact could be a jump of 10 cents per gallon this weekend but more if the outage persists. "If it continues it could mean 15 to 20 cents," he said.
Prices are already moving higher at the wholesale level. The New Jersey Gasoline, Convenience Store, and Automotive Association reported a 7 cent-per-gallon jump in regular unleaded wholesale prices between early Thursday morning and early Friday.
"They reported those prices at the rack. We are confident once the supply issues are resolved we'll see prices fall back to the level they were previously," said Jacy Lance, spokeswoman for the NJGCA.
She said there's been no shortages seen yet. "They're bringing some stuff in by boat. There's going to be a lot more tanker trucks on the road. We haven't heard of any issues of supply yet," Lance said.
Even with this outage, analysts still expect to see some of the lowest gasoline prices in years for this time of year due to a glut of refined products and crude oil.
For drivers, retail prices have not seen much impact yet. The national average for unleaded gasoline at the pump is currently $2.18 per gallon, the same price its been since last week, but some East Coast states are seeing a slight creep up in prices, according to AAA data.
In Georgia for instance, the average price pump was $2.13 per gallon, a jump of 3 cents overnight but just 2 cents higher than last week.
In Virginia, prices averaged $1.98 per gallon Friday, up a penny from Thursday but still a cent lower than last week's level. In South Carolina, prices rose overnight by a penny to an average $1.93 per gallon. In Pennsylvania and Washington, D.C., however, the average was actually lower since Thursday.
In New Jersey, the average price at the pump is $1.97 for a gallon of gasoline, basically unchanged from Thursday but down a penny from last week.
The Colonial Pipeline has been out since Sept. 9 after a leak in Alabama. The pipeline has a capacity of 1.4 million barrels a day, and was expected to come back online, but on Thursday the company delayed the restart until next week.
"It was a small leak, it should be really transitory. It was 6,000 barrels but they said they can't figure it out yet," said Kilduff.
According to Lipow, the loss of supply should be around 14 million barrels of gasoline by Monday but there remains an oversupply of gasoline on the East Coast and in the rest of the country.
He said Colonial is rerouting some gasoline from the downed Line 1 to its distillate line, known as Line 2. The Colonial Pipeline transports fuel from the Gulf Coast refineries in Texas and Louisiana to markets in the Southeast and mid-Atlantic, up through Washington, D.C., Philadelphia and New York.
But gasoline prices should still edge toward $2 per gallon nationally this fall, absent a major disruption.
Once the pipeline returns, "then we'll see prices level out and start to come back to resupply the market, but it will take awhile. Crude prices will remain under pressure," he said.