Harvey expected to trigger modest gas price hike

Paterniano Del Favero
Agosto 29, 2017

Gas prices in New Jersey have held steady at an average price of $2.35 a gallon for regular as of Monday, according to GasBuddy.com, but that could change depending on how much damage Harvey inflicts.

"There were fears this could be a Katrina-like event", says Tom Kloza, global head of energy analysis for the Oil Price Information Service.

Prompt US gasoline differentials in the Gulf Coast hit a five-year high.

As of Monday afternoon, prices in Texas had already risen about three cents from the week before - hardly a dramatic spike, though gas is usually headed the other way this time of year, Mac said.

That being said, McTeague advised people to "keep watching" what's happening with Hurricane Harvey.

U.S. crude futures fell as the refinery shutdowns could reduce demand for American crude.

Crude prices dipped on Tuesday as the market grappled with the shutdown of some 13 percent of refining capacity in the United States after a hurricane ripped through the heart of the country's oil industry.

International Brent crude futures were up 29 cents, or 0.6 percent, at $52.18 per barrel.

There might also be around 300,000 bpd of onshore US production shut in, trading sources said.

USA weather services downgraded Harvey to a tropical storm on Saturday. but torrential rains have continued to drown the area and are expected to continue for most of the week. That amounts to almost 379,000 barrels of oil per day.

Texas is home to 5.6 million barrels of refining capacity per day, and Louisiana has 3.3 million barrels.

It added that the storm's impact would "linger for several more weeks".

Short-sellers boosted bets on declining West Texas Intermediate prices by the most since June in the week ended August 22 as futures chopped around $47/bbl without a clear direction. Those hurricanes also temporarily disrupted refining capacity.

Sharara stopped pumping oil a week ago, after a militant group seized control of the pipeline that feeds crude from it to the Zawiya export terminal, and is still idle, a person familiar with the situation.

"The flooding now taking place is however leading to a greater loss of onshore supply (from the Eagle Ford) than historically has been the case", the analysts said.

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