En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

U.S. gasoline hits $2/gallon Thursday as Harvey wreaks havoc on refiners; crude weak




By Henning Gloystein

SINGAPORE
Petroleumworld 08 31 2017

Gasoline prices in the United States hit $2 a gallon for the first time since 2015 on Thursday as flooding from storm Harvey knocked out almost a quarter of U.S. refineries, while crude prices remained weak as demand dropped following the outages.

Harvey has battered the U.S. Gulf coast since last Friday, ripping through Texas, Louisiana and the heart of the U.S. petroleum industry. At least 4.4 million barrels per day (bpd) of refining capacity was offline, based on company reports and Reuters estimates.

Amid fears of a supply squeeze, U.S. gasoline prices on Thursday jumped to $2 per gallon for the first time since July 2015, and traders from Europe to Asia were scrambling to fix fuel cargoes to the United States.

Goldman Sachs said it could take several months before all production could be brought back online.

“While no two natural disasters are similar, the precedent of Rita-Katrina would suggests that 10 percent of the ... currently offline capacity could remain unavailable for several months,” the bank said.

While gasoline spiked, crude markets remained weak after already falling sharply the previous day. The closure of so many U.S. refineries has resulted in a slump in demand for the most important feedstock for the petroleum industry.

U.S. West Texas Intermediate (WTI) crude futures were trading at $46 per barrel at 0708 GMT, slightly above last day's settlement, when prices fell by 0.8 percent intraday.

International Brent crude was at $50.74 a barrel, down 12 cents from the previous day, when the contract fell by more than 2 percent.

“The temporary closure of refineries is a major dent to United States' crude demand and is weighing on both Brent and WTI prices,” BMI Research said.

Analysts said that the heavy WTI discount with Brent was a result of shut in U.S. crude supplies due to pipeline and refinery closures.

Harvey could be the worst storm in U.S. history in terms of financial cost.

“The economy's impact, by the time its total destruction is completed, will approach $160 billion,” said Joel N. Myers, president and chairman of meteorological firm AccuWeather.

Other estimates have put the economic losses from Harvey at under $100 billion.

Although Harvey keeps getting weaker, meteorologists say more floods are expected.

AccuWeather said “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.”

Beyond Harvey, U.S. commercial crude oil stocks fell by 5.39 million barrels last week, to 457.77 million barrels, according to data released Wednesday by the U.S. Energy Information Administration.

That's down 14.5 percent from record levels reached last March.

The big draw in crude came as U.S. gasoline demand hit a record 9.846 million bpd last week, and as U.S. refinery use rates rose to 96.6 percent, the highest since August 2015.

However, the data was collected before Hurricane Harvey hit the Gulf Coast.



Story by Henning Gloystein; Editing by Richard Pullin and Tom Hogue from Reuters.

reuters
.com
08 31 2017
03:14AM EDT

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.