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Harvey may hike gas prices, maybe not

31 Août 2017

Gasoline rose to a two-year high as Tropical Storm Harvey hit the U.S. Gulf coast again after already knocking out a fifth of the nation's refining capacity.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October were down 0.3% at $47.71 a barrel in the Globex electronic session. The New Orleans-Baton Rouge region is home to 10 refineries that can process up to 2.6 million barrels of oil per day, according to the Oil Price Information Service.

At least 3.6 million barrels per day of refining capacity are offline in Texas and Louisiana, or almost 20 percent of total us capacity, based on company reports and Reuters estimates.

Goldman Sachs sees "property damages in the range of $30 billion" from Harvey in Texas, and a reduction in overall US economic growth due to storm-related energy disruptions.

The hurricane has knocked out about 15 percent of the nation's refining capacity, which is concentrated on the Gulf Coast of Texas and Louisiana. United States gasoline prices rose to a more than two-year high of Dollars 1.84 per gallon early on Wednesday.

As of Tuesday afternoon, the average price for a gallon of gas in Greensboro was $2.28, up 8 cents from Friday.

"The damage could worsen if continued rains extend the flooding", agreed BMO Capital Markets economist Sal Guatieri.

"While gas prices have the potential to increase following the devastation from Hurricane Harvey, it's important we stress to motorists to avoid panicking at the pump", said AAA Carolinas spokesperson Tiffany Wright.

Colas, filiale de Bouygues, acquiert le groupe canadien Miller McAsphalt
Signé le 30 août 2017 à Toronto, ce protocole d'accord porte sur le rachat de 100% des titres du groupe, qui devrait être bouclé début 2018, sous réserve de l'obtention d'approbations réglementaires, précise Colas .

This dislocation of both USA crude imports and exports is likely to have an impact across global oil and product markets.

"The market focus seems to be on the quantity of refinery capacity shut-ins and potential to hit oil demand", said Giovanni Staunovo, an analyst at UBS Group AG in Zurich.

Harvey-related energy disruptions in the U.S.

Even so, it will take refiners in the Houston area a while to fully recover to normal production.

"For now Harvey has nipped oil's recovery in the bud", OANDA analyst Jeffrey Halley told Agence France-Presse.

While the impact of previous hurricanes such as Sandy and Katrina were undeniably devastating, Harvey is expected to be the costliest due to Houston's economic importance.

Motiva's massive oil refinery in Port Arthur, the largest in the country, is now running at 40% capacity, according to the company. Another pipeline that carries crude from the big Permian Basin field in Texas to Houston-area refineries is also closed.

"There is a danger of life-threatening inundation, from rising water moving inland from the coastline, during the next 12 to 24 hours", the NHC said, adding that 6 to 12 inches of rain could fall in far east Texas and southwestern Louisiana. Corpus Christi looks as though everything is fine, and they're restarting in two or three days.

Harvey may hike gas prices, maybe not