U.S. senator urges Trump to tap fuel, oil reserves in Harvey's wake

Remigio Civitarese
Settembre 1, 2017

"The biggest impact of this storm will be a significant reduction of crude oil imports into the Texas Gulf Coast", Andy Lipow at Lipow Oil Associates, a Houston-based consultancy, told the Financial Times, adding that the refinery shutdowns and possible flooding could raise national gasoline prices by 5 to 10 cents a gallon.

Gasoline futures spiked on Wall Street on Thursday with several key refineries offline due to Harvey, which is now a tropical depression.

USA offshore regulators estimated that, as of Monday, about 19 percent of the total daily production from the Gulf of Mexico was idled by the storm, which remains parked over parts of south Texas.

"It will be a while before operations can return to normal and the U.S. refining industry is bracing itself for an extended shutdown", Stephen Brennock of oil broker PVM said. Gasoline futures climbed as much as 8% to a 25-month intraday high in New York Thursday.

Overnight the AAA said retail gasoline prices were up to $2.404 per gallon of regular gasoline nationwide, a six-cent increase from a week ago.

"Given the unprecedented flooding in the city of Port Arthur, it remains uncertain how quickly the flood waters will recede, so we can not provide a timeline for restart at this time", the company told AFP.

Meteorologists said that Harvey could be the worst storm in USA history in terms of financial cost.

The recovery from Harvey will mimic the storm's path from west to east. Flint Hill Resources' refinery in Corpus Christi, where Harvey made landfall as a Category 4 hurricane, could begin to restart - a process that takes days - as early as Wednesday. Yet crude remains in ample supply.

Hurricane Harvey took direct aim at the country's Gulf Coast energy machine.

Gasoline rose still higher post-settlement, after sources told Reuters that Motiva was shuttering the largest US refinery.

AccuWeather also said that "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". On Wednesday, Exxon announced the shutdown of its Beaumont, Texas refinery as well due to "operational issues" caused by Harvey.

Consider that US oil companies had stockpiled 463 million barrels of crude as of last week, according to the government.

Analysts called the status of United States refineries a key to oil prices.

This came on the back of record US gasoline demand of 9.846 million bpd last week, and as USA refining utilization rates rose to 96.6 percent, the highest percentage since August of 2015.

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