Gasoline jumps, crude down; Harvey shuts 24 pct of United States refining

Gasoline jumps, crude down; Harvey shuts 24 pct of United States refining

Gasoline jumps, crude down; Harvey shuts 24 pct of United States refining

Floodwaters from the San Jacinto River inundate condominiums in the aftermath of Tropical Storm Harvey on Wednesday, Aug. 30, 2017, in Kingwood.

Hurricane Harvey is sending pump prices higher for U.

However, US gasoline futures RBc1 reached a two-year peak above $2 a gallon due to rising concerns of a fuel shortage.

AccuWeather also said that "the worst flooding from Harvey is yet to come as rivers and bayous continue to rise in Texas with additional levees at risk for breaches and failures".

The storm has been a boon for the value of refined products.

The outages and limited supplies have hit wholesalers. Midwest refiners have the added advantage of pricing their fuel based on benchmark prices in the Gulf Coast markets, which hit five-year highs on Monday.

The devastation killed at least 35 people and knocked an estimated 4.4 million barrels per day (bpd) from the refining capacity. That is about 24 percent of USA refining capacity and nearly equal to the national daily consumption of Japan.

"As the refineries restructured the more competitive refineries have expanded", said Antoine Halff, Director of the Global Oil Markets Research Program at Columbia University, "The capacity is now in the hands of a few very large players in a few very large plants". Portions of the refinery were flooded after more than a foot of rain dropped overnight. That represents almost a quarter of US refining production, and restarting plants under even the best conditions can take a week or more.

"The refineries shut down as a precaution might be able to restart". Crude markets were also looking at disruptions in Libya and Colombia. That's up 13 cents from last week's average.

It also reported that almost 17.73 million bpd of crude oil was transported to refineries.

Restarts after a storm are especially unsafe for refiners, though the Corpus Christi area received much less rain than the Houston metro area.

It could take two weeks or longer before big refineries in the Houston area can recover from a record-setting deluge and resume normal operations, assuming they didn't suffer serious damage, which is still unknown.

They added that they would expect about 10 percent of what is now offline would stay shut for several months.

Energy information provider S&P Global Platts said in a report Wednesday that roughly 2.33 million barrels per day of Texas's refining capacity was still shut down.

Gasoline futures gained 7 percent on Wednesday alone.

USA crude and product stocks, typically watched closely by oil investors as they reflect market balancing, were largely ignored this week.

Overnight, the AAA said retail gasoline prices were up 6 cents from a week ago at $2.404 per gallon of regular gasoline nationwide.

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