The two hurricanes each affected fuel demand in different ways for Murphy USA.
“With Harvey, there was very little prebuying,” said Clyde, referring to how many residents decided to fuel up before Hurricane Harvey hit. “With Irma, especially given the evacuation orders, there was a substantial number of stores experiencing very high burn rates prior to landfall followed by a noticeable lack of demand following the storm's departure.”
In fact, demand is still “subdued” weeks after the hurricanes passed in Texas and Florida, and volume sales have only recently bounced back to seasonal levels.
Total retail gallons slipped 5.5% during the third quarter. On an average per-store-month basis, volumes were 243,000 gallons for the three months ending Sept. 30, 2017, which is a 9.5% decline from third-quarter 2016. “We estimated that well more than half of these declines were the direct results of the disruption created by the hurricanes,” said Clyde.
The average retail price of gasoline for the quarter was $2.22 per gallon, compared to $1.98 per gallon in third-quarter 2016.
Murphy USA forecasts its full-year 2017 fuel volume to be 4.15 billion gallons, which is lower than 2016’s 4.195 billion-gallon total, and off the retailer’s guidance range of 4.3 billion to 4.5 billion gallons. It expects its average per-store per-month gallons to also fall short of its guidance range of 255,000 to 265,000 gallons. Instead, Murphy USA is forecasting full-year volumes to average about 245,000 gallons, or 5% below its 2016 average.