Prices were up as much as 7 percent on Sunday night, and were trading around 4 percent higher in early trading Monday.
Flooding and other damage from the storm are expected to cut at least 1 million barrels per day from refining capacity. Shell, Exxon, and several other refineries in the area announced plans to shut down on Sunday. Major roadways and waterways are also closed, making it impossible to ship refined gasoline out of the area.
"The big picture is that we've got all the refineries down in Corpus Christi and half of them are now down in the Houston area. And I anticipate the other half are going to shut down over the next couple of days, which means that one-fifth of the nation's capacity is offline. The biggest issue that they're facing is the amount of flooding and the damage to the equipment that perhaps might keep them offline for weeks or even months," said Andy Lipow, president of Lipow Oil Associates.
"What I would say to the consumers: They need to be prepared to see gasoline prices go up 15 or 20 cents a gallon," Lipow added.
The hurricane and subsequent tropical storm could drop as much as 50 inches of rain, setting a Texas record.
Goldman Sachs analysts said gasoline and distillate product refining margins are likely to rise further in the wake of the storm.
Using past hurricanes as a guide, Goldman estimated the storm would increase domestic crude oil availability by about 1.4 million barrels a day — because of refinery shut-ins. It would cut gasoline supplies by 615,000 to 785,000 barrels per day (bpd) and reduce distillate supplies by 700,000 bpd.
"Larger refinery outages would increase these long crude and short product impacts," Goldman wrote. "The loss of (U.S. Gulf Coast) refining capacity will further support refinery margins for non-affected refiners to incentivize them to operate at higher utilization."
—Reuters contributed to this report.