Hurricane in Gulf Coast damaging Gasoline & Oil Markets
Hurricane Harvey
During the weekend a huge hurricane hit U.S. Gulf coast!
It crippled Houston and flooded the Texas area. The port in Houston is damaged really serious and it knocked down the crude production in numerous refineries along the shore.
Gasoline prices hit two-year highs, influenced by massive floods caused by the storm. It forced U.S. Gulf Coast to ship orders from across the sea.
Oil market
Observing crude markets, U.S. futures fell. Later, U.S. refinery shutdowns could cause the reduced demand for American crude.
Brent futures also eased.
The Harvey hurricane killed at least 2 people, and it is the strongest hurricane in last half a century. It caused a Houston port closure, while it shut down numeros refineries.
“The U.S. National Hurricane Center (NHC) said on Monday that Harvey was moving away from the coast but was expected to linger close to the shore through Tuesday.”
“The floods would spread from Texas eastward to Louisiana.”
Oil refining in Texas
Oil refining in Texas composes of 5.6 million barrels of refining capacity daily. Louisiana has 3.3 million barrels. The storm shut down over 2 million bpd.
“Spot prices for U.S. gasoline futures surged 7 percent to a peak of $1.7799 per gallon, the highest level since late July 2015, before easing to $1.7281 by 0703 GMT.” (Reuters)
To replace the lost outputs, and in order to avoid fuel shortage, U.S. traders were shipping cargoes from North Asia.