Largest US Refiner Shuts Down as Harvey Makes Second Landfall

A gas station submerged under flood waters from Tropical Storm Harvey is seen in Rose City Texas U.S

A gas station submerged under flood waters from Tropical Storm Harvey is seen in Rose City Texas U.S

Since the devastating flooding in South Texas and Louisiana has disrupted far more crude oil refining capacity in the region than production capacity, the net result of the storm has been less crude oil being refined and less gasoline being produced.

In fact, as the world's largest refined product exporter, disruptions in the US will be felt around the world.

Western Canadian Select strengthened on Thursday, with the discount to futures shrinking 50 cents to $11.25 a barrel, data compiled by Bloomberg show.

But in recent months those expectations dimmed.

The monthly poll of 33 analysts and economists projected Brent crude to average $53.53 a barrel in 2017, slightly higher than last month's forecast of $52.45.

The U.S. Environmental Protection Agency, meanwhile, granted a waiver on low-volatility conventional gasoline requirements to 12 more states to boost gasoline supply in areas hit by fuel shortages.

Now that Hurricane Harvey has left the Coastal Bend, here are some post-storm safety tips.

The release includes 200,000 barrels of sweet crude and 300,000 barrels of sour crude oil, the statement said.

Exxon lost almost 100,000 bpd of production, and Shell has so far lost more than 700,000 bpd.

Closure of roughly a quarter of the US refining industry sparked fears of fuel shortages before the Labor Day weekend and cast doubts on refinery demand for crude.

The nation's largest oil refinery is waterlogged and shut down after Harvey ravaged Port Arthur, Texas.

This widened the crack spread, the difference between the prices of US gasoline and crude oil.

Prime Minister Narendra Modi Arrives in China
He said the bloc was committed to to observing the principles of the UN Charter and global law. Prime Minister Narendra Modi emplanes for China to attend the 9th BRICS Summit .

Only Hawaii, where AAA reported on Friday gasoline was averaging $3.09 a gallon, has a higher average gas price.

In crude markets, the impact from Harvey could linger for some months, and alter trade flows as market participants seek to take advantage of arbitrage opportunities.

"As a result, increased gasoline flows from Europe to the US will continue at least for three to four weeks".

In early afternoon Asian trade, USA benchmark West Texas Intermediate was down 14 cents at $46.30 while Brent crude for October eased 21 cents to $51.79.

Worldwide benchmark Brent crude was up $1.47 per barrel, or 2.89 percent, at $52.33 a barrel.

In crude oil, the front-month contract in WTI was down $0.18, or 0.04%, at $47.05 a barrel on NYMEX.

While Asia's imports of USA light crude will no doubt be lower in October and November because of the hurricane's impact, they may come back strongly in subsequent months.

The Explorer Pipeline, which hauls fuel from the Gulf Coast to the Midwest region, aims to restart its main lines this weekend as refineries indicated they would be able to resume supplies after Tropical Storm Harvey, a spokesman told Reuters.

Federal authorities have not ruled out releasing crude to other refiners.

Freight rates between Europe and the United States for a 37,000 tonne refined product tanker doubled over the past week to about $16,000 a day, according to shipping brokers. "The value of crude is lower because it's stuck". Asian refiners are also keen to buy US cargoes and concerned about delays of those they have already bought, shipping sources said.

It remains to be seen whether this can be done at relatively short notice, but as things stand now, Harvey is providing a wealth of trading opportunities.

Recommended News

  • Houston forced to open more mega-shelters

    Houston forced to open more mega-shelters

    But it's hard, knowing some of her friends and family are still in flooded homes, and that her middle school is flooded. Authorities and family members are reporting more than a dozen storm-related deaths in Texas due to Hurricane Harvey.
    Mumbai building crash: SP holds MHADA, SBUT responsible

    Mumbai building crash: SP holds MHADA, SBUT responsible

    Just two days after heavy rains lashed Mumbai , a three-storeyed building collapsed in the Dongri area on Thursday. A total of 29 people have been rescued so far, and five of them are in a critical condition in hospital.
    Jayasuriya-led Lanka selection panel quits after flop show vs India

    Jayasuriya-led Lanka selection panel quits after flop show vs India

    Rajaratnam School of International Studies (RSIS), Singapore and the National Institute of Fundamental Studies (NIFS), Colombo . Malinga needs just one wicket to take his career ODI haul to 300, but he is not preoccupied with reaching the milestone.
  • Canton-Potsdam Hospital reports human West Nile virus case

    Canton-Potsdam Hospital reports human West Nile virus case

    On 21 July, the health department confirmed that the mosquitoes of Zion have been tested positive for having the West Nile Virus. Wear clothing that reduces the risk of skin exposure to mosquito bites (i.e., long trousers and long-sleeved shirts).
    Attorney general offers tips on avoiding Hurricane Harvey donation scams

    Attorney general offers tips on avoiding Hurricane Harvey donation scams

    I wish I could answer your question, but it's not something I have visibility on in the role that I play in this organization. GlobalGiving, a crowdfunding site for charities , is trying to raise $2 million for local relief and recovery efforts.
    Mueller reportedly working with top Trump foe, could end-run presidential pardon

    Mueller reportedly working with top Trump foe, could end-run presidential pardon

    Politico said no decision had been made on whether to file charges, and quoted one of the sources as saying 'Nothing is imminent'. The president said he settled just to have the matter behind him, though his previous mantra was never to settle cases.
  • Gas prices surge higher as drivers rush to fill tanks

    Gas prices surge higher as drivers rush to fill tanks

    Motor fuel prices climbed as much as 6.6 percent in NY , advancing for an eighth session, while crude oil was little changed. "The lines remain down from Houston to Hebert due to the storms", notes the Colonial Pipeline Company's website.
    Seahawks trade WR Jermaine Kearse for Sheldon Richardson

    Seahawks trade WR Jermaine Kearse for Sheldon Richardson

    DT Sheldon Richardson is heading to Seattle, while at least one draft pick and WR Jermaine Kearse is heading to NY . After years of playing on the defensive line, the Jets started the 26-year-old at linebacker in 2016.
    Gas Prices Rising In The Wake Of Hurricane Harvey

    Gas Prices Rising In The Wake Of Hurricane Harvey

    But that number should rise, since the Texas Gulf Coast is home to almost a quarter of the country's gasoline production. Tuesdays are recommended for "topping off" because while prices are not the cheapest, they're still usually pretty good.
  • Temple Student Found Brutally Murdered After Leaving Bar With Suspect

    Temple Student Found Brutally Murdered After Leaving Bar With Suspect

    Police have searched a home on the 1700 block of 16th Street, which is said to be the home of a friend of Jenna's. Family member Ed Burleigh said Saturday on Facebook "Our Beautiful Angel Jenna is now in Heaven".
    1-year-old child and mom taken, last seen near Pueblo

    1-year-old child and mom taken, last seen near Pueblo

    Adams County sheriff's officials said at a news conference that Venzor-Gonzalez should be considered armed and unsafe . According to information released by the CBI Friday afternoon, Zahid and Samantha Adams have been located.
    Mbappe told me he will join PSG on Tuesday - Rabiot

    Mbappe told me he will join PSG on Tuesday - Rabiot

    The 18-year-old sensation underwent a medical at Clairefontaine, France's training base, on Tuesday morning while on global duty. He broke several records and struck six times in six matches in the knockout stages of the Champions League in 2016-17.

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.