En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

Hurricane Harvey hits U.S. fuel supplies to Latin America

 




By Devika Krishna Kumar

NEW YORK
Petroleumworld 08 28 2017

Tropical Storm Harvey could cause fuel shortages in Latin America after it shut in around 1 million barrels per day of U.S. gasoline and diesel exports typically destined for countries such as Mexico.

Harvey barreled into Texas on Friday as the strongest hurricane to hit the state at the heart of the U.S. oil and gas industry in over 50 years.

The United States is the world's largest net fuel exporter, and most of those shipments sail from ports in Texas and Louisiana. Harvey shut down the ports of Corpus Christi and Houston in Texas, and both are major fuel export ports.

“Any hiccup in U.S. refined product exports is highly disruptive to the supply chain given the dependency of nations like Mexico and other Latin American countries on the U.S.,” said Michael Tran, director of global energy strategy at RBC Capital Markets.

“The reliance on U.S. products is particularly key this year given that many refineries in Central and South America are running at abysmal levels.”

Latin American countries such as Mexico and Venezuela have become increasingly reliant on imports because they have failed to invest in expanding refineries to keep up with rising demand.

The U.S. exported 2.49 million barrels per day (bpd) of refined products and 100,000 bpd of crude to Latin America in the first quarter, according to the Energy Information Administration. Over 950,000 bpd ended up in Mexico - the biggest overseas market for American-made fuel.

Mexico depends on U.S. fuel to meet nearly three quarters of its domestic gasoline demand.

A spokesperson for Mexican national oil company Pemex said its gasoline and diesel inventories were sufficient to make up any shortfall in supply Harvey may trigger.

“New shipments via safe routes are on the way (to Mexico) and left on time from the southern Untied States before the hurricane arrived,” he said.

He did not detail the volumes Mexico holds in stockpiles or how many days of demand could be covered with emergency supplies.

Aside from waterborne shipments, the United States also sends supplies to Mexico via rail and road, but those flows have been hit too.

Union Pacific Corp, the no. 1 U.S. railroad, said it was moving rail cars in yards prone to flooding to high elevations and would curtail trains operating through areas likely to be hit by excessive winds and rain that will impact operations.

Serious disruption to global oil supplies could trigger a coordinated international release from the Paris-based International Energy Agency (IEA). The IEA has previously released emergency supplies to cushion the impact of natural disasters and war on international energy supplies.

It is unclear when the port of Houston will reopen as Harvey is forecast to move closer to the area in coming days, dumping torrential rain. The port of Corpus Christi suffered minor infrastructure damages but was making preparations to restart, a spokeswoman said on Sunday.

EUROPE

Fuel supplies to Europe will also be disrupted by the storm. The United States is the biggest source of ultra low sulfur diesel to Europe and Latin America.

Latin American countries such as Mexico will need to seek diesel supplies from Asia and the U.S. West Coast, traders said.

“They will have to pay high,” said one trader of distillates, a group of fuels that includes diesel and jet fuel.

Europe would be the most likely source of more gasoline for Latin America, said Vikas Dwivedi, global oil and gas strategist at Macquarie.

“If there are a lot of shutdowns, whatever capacity is running will get consumed in the U.S., it will have to be, so Latin America will have to get its barrels from elsewhere. It creates a domino effect,” Dwivedi said.

Harvey's effect on the prices of gasoline and diesel will have an impact on fuel prices in Colombia, mining and energy minister German Arce told Reuters.

At least 2 million bpd of Gulf refining capacity is currently offline and damage assessments at four Corpus Christi, Texas, area oil refineries were underway on Saturday, a first step toward resuming production. However, by Sunday, more refineries were shuttered as the threat of flooding grew.

Alternative supplies for some Latin American countries would have come from within the region several years ago, but the largest fuel producers such as Brazil and Venezuela now have very limited capacity for exports.

Just over a decade ago, which was the last time a storm as powerful hit the U.S. mainland, the country was the biggest net importer of refined products in the world.

"It's a completely different world now than 2008 in terms of crude and products flows," said Matt Smith, director of commodity research at ClipperData.



Reporting by Devika Krishna Kumar in New York; Additional reporting by Marianna Parraga in Houston, David Alire Garcia in Mexico City, Julia Cobb in Bogota and Jessica Resnick-Ault in New York; Editing by Simon Webb and Andrew Hay from Reuters.

reuters
.com
08 27 2017

We invite all our readers to share with us
their views and comments about this article.

Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

 



Sept. 14-15,
Accra, Ghana

 

Nov 13-14 ;
Mexico City, Mexico

 

 

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.