- The source of this article, Storm’s Impact on Oil Industry Is Felt at Gasoline Pumps, is from the news source The New York Times and was posted August 31, 2017.
The article, Storm’s Impact on Oil Industry Is Felt at Gasoline Pumps, shows how natural disasters can influence supply and demand and how the elasticity of the demand influences the product’s price. The economical effects of Hurricane Harvey are soaring gas prices. The gasoline ports are closed to the fuel barges and the refineries are flooded. Drilling rigs in Texas are also running low on diesel supplies. This directly affects the supply of gasoline since the Texas oil centers on the gulf provide a third of the United States’ oil. This in turn has caused prices to increase along the southern and east coast. The east coast could have oil exported by railroad from the midwest however this would be more hazardous and expensive when compared to transportation through pipeline. Due to the inelastic demand buyers have on gasoline, consumer shortages may occur the longer the supply ceases. To avoid this, the Energy Department released a substantial amount of crude oil from the Strategic Petroleum Reserve, this was the first emergency release since 2012.