Hurricane Harvey – the most severe storm that has reached the territory of the United States since 2004, has led to the closure of more than 10% of processing capacity along the coast of Texas. Fuel prices increased by 6.8%, while the quotes of WTI futures are consistently consolidated slightly below $ 48 per barrel.
Strong floods, like the aftermath of a hurricane, led to a failure in the pipeline network (Longhorn and Bridgetex pipelines were closed with a total refining capacity of 675,000 barrels per day, connecting West Texas and Houston). According to the Commission on the work of the railways of Texas, the extraction in the south-west Texas of the Eagle Ford deposit should be reduced by 300 – 500 thousand barrels per day. The Bureau for Safety and Environmental Protection gives the following statistics: in the Gulf of Mexico, about 22 percent of the capacity (378,000 barrels per day) is in the autonomous mode.
In this case, this week is expected to 3 more heavy showers in the Houston area, so the cost of gasoline may well continue to rise. September delivery futures, traded on the NYMEX, rose 11.33 cents to 1.7799 dollars per gallon, which is the highest intraday high since July 2015. The spread in prices between Brent and WTI at the moment is about 4.88 dollars, but a little earlier it reached 4.96 dollars, which is the maximum value for 2 years.
In the weekend, financial media, with reference to a source in the oil protection agencies, circulated information that two deposits in Libya (El-Feel and Elephant) ceased production after the capture of the pipelines by two paramilitary groups. The State National Oil Corporation has already declared force majeure on deliveries from these fields. At the same time, supplies from the Hamada field will gradually decline and will be suspended on Monday (today).