Texas faces fuel 'crisis' as depleted gasoline stations deal with panic buying

• Gasoline stations could come under pressure this Labor Day weekend as Americans take to the road amid lingering refinery outages following Harvey.
• There were signs of panic buying at gas stations in Dallas, potentially leading to a self-fulfilling prophecy of shortages. Texas Gov. Greg Abbott advised people, "We will not run out."
• Analysts said gasoline prices were likely to rise to a national average of $2.60 to $2.80.

U.S. gas stations may come under stress this Labor Day weekend as the lingering effects of Hurricane Harvey snarl the supply chain that moves fuel from refineries to the retail locations where Americans fill up their tanks.

Panic buying in some areas was exacerbating the supply crunch. Long lines have already formed at stations in the Dallas-Fort Worth area as Texans took preventative measures ahead of the Labor Day weekend, local news reported.

Texas Gov. Greg Abbott tried to calm nerves on Friday, saying at a news conference, "There's plenty of gasoline in the state of Texas," Reuters reported. "Don't worry. We will not run out."

On the other end of the supply chain are the refineries that produce gasoline and other fuels. Flooding from Harvey knocked out 20 to 25 percent of U.S. refining capacity, leaving some pipelines starved of fuel.

Abbott said the state had worked with refiners in Louisiana, Oklahoma and other states to send additional supply ahead of the Labor Day weekend.

On Friday, trucks were lined up outside fuel terminals, hoping to haul away gasoline and diesel to restock depleted tanks at convenience stores and truck stops, according to the head of a distribution company.

Harvey Steinhagen, president and CEO of PetroTexFuels, said lines of trucks formed around midday at Beaumont, Texas, terminals operated by Motiva. There was a similar scene at the Delek terminal in Tyler, Texas, east of Dallas earlier on Friday, he said.

Usually, once terminals run out of their fuel supply, trucks that don't get their fill will head back to headquarters or seek fuel at other terminals, Steinhagen told CNBC. He anticipated that could happen on Friday.

Delek has seen increased demand from its regular customers as well as distributors who are looking for fuel that wasn't available at terminals further south, said Keith Johnson, vice president of investor relations at Delek. While he couldn't identify specific products that had run out at Delek terminals, he said it's possible that has occurred.

"We're working to try to replenish as fast as we can if that has occurred," he told CNBC.

Motiva did not immediately return inquiries about conditions at terminals.

Steinhagen said by early Friday morning, underground inventories at PetroTexFuel's company-owned and operated stores in southeast Texas were running dry.

"By Monday, Texas will be in crisis for petroleum fuel," he said. "I am not a crisis man, but with the refineries down, power outages, roads flooded and pumps underwater this is a crisis."

Analysts told CNBC that national average gasoline prices are likely to tick up to a range of $2.60 to $2.80 a gallon. The average was $2.519 on Friday, according to AAA.

The effect is likely to be felt beyond Texas as outages in the Port Arthur and Beaumont, Texas, hub — home to about 8 percent of U.S. refining capacity — prevent fuel from flowing to other states, said Andy Lipow, president of Lipow Oil Associates.

"It's definitely going to be tight, so we're all waiting to see how much of the refinery capacity gets online," he said. "You take out a third of the refining capacity for a while, it's going to be dire."

Corpus Christi, Texas, refiners were in good shape, and Texas City facilities were up and running, he noted. The critical Colonial Pipeline, which moves gasoline and other fuel from Texas to the East Coast, is trying to restore a partial outage by Sunday, while Magellan Midstream Partners aimed to get pipelines that bring crude oil from western Texas to the Gulf Coast running by late Friday or early Saturday, Reuters reported.

That said, supply shortages could manifest as a sort of self-fulfilling prophecy. A shortage can materialize if worried drivers continually refill partially full tanks fearing gas pumps will run dry, leading to an actual shortage, Lipow explained.

"The system is not set up for everybody to be riding around with a full tank of gas, and we have a high percentage of people who are filling up their tanks. That means there are more people who have less fuel available," Jeff Lenard, vice president of strategic industry initiatives at the National Association of Convenience Stores, told CNBC's "Power Lunch" on Friday.

John Kilduff, founding partner at energy hedge fund Again Capital, on Friday stressed that the United States has gasoline inventories above average.

"There's enough gasoline. You may not like the prices you're paying for it, but there's no reason for any kind of panic to ensue," he told CNBC's "Worldwide Exchange." "Yesterday in Dallas was just a ridiculous situation. You saw the downside of social media, where people thought they were running out of gasoline."

The eastern United States is likely to feel the biggest impact, according to Tom Kloza, global head of energy analysis at Oil Price Information Service. Something on the order of 40 percent of capacity that serves Americans east of the Rockies has been affected.

"This is an unprecedented event, and it's got some unknown outcomes," he told CNBC's "Fast Money: Halftime Report" on Thursday.

— Reuters contributed to this report.

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