Sep 1, 2017

Energy Secretary tapping emergency crude reserves to ease gas prices

Jacquelyn Martin / AP

Energy Secretary Rick Perry announced Thursday he will be releasing 500,000 barrels of crude oil from an emergency reserve to ease gas price spikes in light of disruptions to energy infrastructure due to Hurricane Harvey, per the AP.

  • The EPA has also expanded emergency gasoline waivers to include 38 states and D.C. to avoid disruptions related to the storm, per the AP.
  • The Department of Transportation is waiving operator qualifications to "expedite the engagement of pipeline" personnel to help with response and recovery S&P Global Platts reports.

The latest on the disruptions:

  • Gas prices: So far, the national average for gas at the pump was up Thursday afternoon to $2.48, up more than 13 cents from last week's average of $2.35, per Gasoline futures shot up 14% Thursday, which indicates gas prices will likely keep increasing.
  • Refining: At least 4.3 million barrels per day of refining capacity, over 20% of U.S. capacity, are offline in Texas and Louisiana, per Reuters. There's a concern that most Texas refineries will be affected for weeks, not just days, CNN reports. The largest refinery in the U.S. in Port Arthur, Motiva's refinery, was shut down, along with Valero, Wednesday. About 15 refineries have shut down in total, accounting for about a quarter of U.S. refining capacity, per
  • Pipelines: Colonial Pipeline, which operates the largest refined petroleum network in the country, had to shut down its major pathways because it doesn't have enough product from the affected refineries. Colonial Pipeline said it expects service to resume Sunday. Explorer Pipeline system is also not operating due to reduced refiner supply, WSJ reports.
  • Reduced supplies: Cities from Texas to Maryland are going to see "significantly reduced or unavailable supply," according to Mansfield Oil Co., WSJ reports. Due to fears of reduced supply, some gasoline is being shipped to the South from the North of the country, an unusual route, WSJ reports. U.S. gas exports to Mexico are also reduced, per S&P Global Platts. Prices are rising on European gasoline products, and is the most expensive it's been in two years, allowing them to profit from overseas shipping, per the WSJ.
  • Fracking delays: More than half of the rigs running in Eagle Ford Shale, one of the nation's busiest oil fields, are estimated to have been suspended. It was the only shale basin of the big four to stop activity, but it's estimated the floodwaters could delay 10% of U.S. fracking, Bloomberg reports.
  • Utilities in Texas and Louisiana reduced the number of customers without power to about 209,000, per Platts. The Public Utility Commission of Texas has suspended some rules to expedite the relief efforts. Centerpoint Energy, Houston's main transmission and distribution utility said about 23,000 are still inaccessible due to floodwaters as of about 10am Thursday. American Electric Power cut customer outages in Texas to 88,000 from a Sunday height of 220,000, per SeekingAlpha.

Go deeper

China tries to contain coronavirus, as Apple warns of earnings impact

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

As China pushes to contain the spread of the novel coronavirus — placing around 780 million people under travel restrictions, per CNN — the economic repercussions continue to be felt globally as companies like Apple warn of the impact from the lack of manufacturing and consumer demand in China.

The big picture: COVID-19 has now killed at least 1,775 people and infected more than 70,000 others, mostly in mainland China. There are some signs that new cases are growing at a slower rate now, although the World Health Organization said Monday it's "too early to tell" if this will continue.

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Apple will miss quarterly earnings estimates due to coronavirus

Apple CEO Tim Cook

Apple issued a rare earnings warning on Monday, saying it would not meet quarterly revenue expectations due to the impact of the coronavirus, which will limit iPhone production and limit product demand in China.

Why it matters: Lots of companies rely on China for production, but unlike most U.S. tech companies, Apple also gets a significant chunk of its revenue from sales in China.

America's dwindling executions

The Trump administration wants to reboot federal executions, pointing to a 16-year lapse, but Pew Research reports the government has only executed three people since 1963.

The big picture: Nearly all executions in the U.S. are done by states. Even those have been steadily dropping for two decades, per the Bureau of Justice Statistics (BJS) — marking a downward trend for all executions in the country.