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Key US fuel lines restart as concerns ease over supply crunch

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HOUSTON: Two key fuel pipelines were set to start up on Monday after certain segments in Texas were shut because of Hurricane Harvey, helping alleviate concerns about rising retail prices and the domestic distribution of gasoline and distillates.


Colonial Pipeline Co, the biggest US fuel system, said on Sunday it planned to reopen the main distillate line between Houston and Hebert, Texas, on Monday, and the gasoline line between those two points on Tuesday. The company had initially aimed to restart both its lines by Sunday.


The company’s pipelines connect refineries along the US Gulf Coast to markets in the Northeast, transporting more than 3 million barrels a day of gasoline, diesel and jet fuel.


Explorer Pipeline said late on Sunday that its Texas-to-Oklahoma 28-inch fuel pipeline started up as expected. Its 24-inch fuel pipeline, which will run from Oklahoma into the US Midwest, will restart on Monday.


The return of supply eased some concerns after the storm took down nearly a quarter of US oil refining capacity, hit oil and gas platforms along the Gulf and lifted average gasoline prices by more than 20 cents since August 23. Explorer Pipeline says 28-inch fuel line started on Sunday


US gasoline futures RBc1 fell by 3 per cent in early trade on Sunday. Futures prices had traded at a two-year high on fears of supply shortages. Gasoline margins RBc1-CLc1 were down 9 per cent.


Colonial is also petitioning the Federal Energy Regulatory Commission to allow it to move so-called transitionary gasoline, a grade between summer and winter blend, which would ease the supply crunch.


On Sunday, average retail prices rose again, to $2.621 a gallon, with weekly increases hitting 18 per cent in Georgia and 19 per cent in South Carolina, according to motorists advocacy group AAA. — Reuters


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