RT Business: Hurricane damage shuts down major United States oil refineries

Lloyd Doyle
August 31, 2017

"As of August 29, we estimate USA refining production offline was 4.1 million barrels per day (bpd); this represents 23 percent of total USA refining production", Goldman Sachs said in a note to clients.

The Permian shale basin in Texas is considered one that's more resilient to the type of depressed market that sidelined investments last year and considerable gains are expected this year by the EIA. U.S. crude was down 44 cents, or 0.95 percent, to $46.00. Brent, the global benchmark, lost $1.14, or 2.2%, to $50.86 a barrel.

The largest refinery in the United States, Motiva Enterprises' 603,000 barrel-per-day (bpd) plant in Port Arthur, Texas, was shutting down on Tuesday night because of flooding.

Canadian gasoline prices shown on the GasBuddy.com website were little changed on Monday.

Other estimates have put the economic losses from Harvey at under $100 billion. Portions of the refinery were flooded after more than a foot of rain dropped overnight.

That's 14.5 percent down from record levels reached last March, and it is below 2016 levels.

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

Gasoline and oil prices continued to diverge today in the wake of Tropical Storm Harvey, as flooding and damage shut almost a quarter of US refinery capacity, curbing demand for crude while raising the risk of fuel shortages.

It also helps that few major USA refiners have reported extensive damage from Harvey so far. Other major storms took place before the US oil boom, when inventory was much lower.

At least 10 refineries have been knocked offline by historic flooding in the Houston and Corpus Christi regions.

"It means if something goes wrong it's a big impact".

The Phillips 66 Sweeny Texas Refinery with a capacity of 260,000 bpd has closed, while output at Marathon's Galveston Bay refinery and the Access Industries plant in Houston were slowed due to the closed ship channel, according to traders and oil industry news services, as cited by CNBC.

Gasoline futures, which reflect wholesale prices to gas stations, jumped 3% on Monday.

Brent oil, the worldwide crude benchmark, settled down $1.14, or 2.2 percent, to $50.86 a barrel.

Petrol margins climbed, as the petrol crack spread jumped 12.5 percent to $23.45 a barrel, the highest on a seasonal basis since 2012. Kloza expects Corpus Christi refineries to reopen within two to three days. September gasoline futures surged up 6% near $1.736 a gallon.

Nationally, regular unleaded gasoline averaged $2.36 a gallon Sunday, up from $2.35 Saturday and $2.33 a week ago.

About a third of the nation's refining capacity is located in the Gulf Coast region. Less certain are the effects on the Houston area, where 30 to 40 inches of rain is expected. The fall was in line with the market's expectations.

There are dozens of refineries along the US Gulf Coast as well as other plants turning oil into gas, diesel, and other petrochemicals. Diesel futures also jumped, gaining 1.2 percent to $1.6854 a barrel and were earlier at their highest since January 9 at $1.697.

Industry sources told Reuters yesterday that Shell staff are reboarding the Perdido oil and gas platform in the Gulf of Mexico in preparation for a restart.

Other reports by Iphone Fresh

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