Crude Oil Prices Remain Pressured by Tropical Storm Harvey

Friday, 01 Sep, 2017

However, this is despite generally bullish data on U.S. inventories.

USA gasoline futures were up 5% at $1.873 per gallon, having hit $1.9140, the highest level in 13 months, Kallanish Energy finds.

September heating oil, which also expires at the settlement, rose 7.3 cents, or 4.4%, to $1.711 a gallon. The average for a gallon of regular gasoline has risen from about $2.35 a week ago to $2.45 now, AAA reported. Still, oil was down 6% for the month.

In the past two years, OPEC has restrained production to prop up prices, because the pain of cheaper barrels was putting too much stress on most members' finances. Low oil prices made it more profitable for refiners to turn oil into gasoline, and they created even more than needed.

US West Texas Intermediate (WTI) crude futures were at Dollars 46.35 per barrel at 0155 GMT, down 9 cents from their last close.

Meanwhile, Brent oil for November delivery on the ICE Futures Exchange in London slipped 4 cents to $50.69 a barrel, after sliding 1.8% a day earlier.

That means the US has 61 percent more oil stockpiled than in the summer of 2008 before Hurricane Ike and 52 percent more than before Hurricane Rita in 2005.

"The shutdown of most Gulf Coast refining capacity is likely to remove the remaining surplus product inventories quickly".

The Colonial Pipeline Company late Wednesday also said it was suspending service to the main pipeline that carries fuel from Texas to the East Coast.

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.

BSEE tabulated the data by polling 31 Gulf operators. "They are now in other markets like the European market, seeking gasoline supplies". The loss of refineries around Port Arthur, Texas, would leave only Louisiana refineries supplying fuel to NY and other demand centers.

President Donald Trump has proposed selling almost half the petroleum reserve amid an oil production boom that has seen USA imports drop sharply in the past decade. "We're already seeing in Corpus Christi that it's going to take weeks to get these refineries back on line...and in Houston, we're just praying they don't get flooded".

Demand was also decreased because Houston, the fourth largest metropolitan area in the US, has been put out of commission, so the need for gas and diesel fuel in the area is low while roads are flooded and businesses are closed. "There has to be somebody at a refinery to receive oil from the Permian or Eagle Ford shale".

Valero and Citgo Petroleum Corp. were said to be preparing to restart their refineries in Corpus Christi after Harvey moved through over the weekend, according to people familiar who asked not to be identified because the plans aren't public.