Crude Oil WTI futures fall despite Harvey

Today Crude Oil WTI futures fell from an opening price of US$47.72 per barrel to US$46.30 per barrel, a decline of 2.98%. The price of the commodity did not experience a rapid rise in price subsequent to Hurricane Harvey making its land fall in Texas Late Friday, August 25, 2017. The category 4 hurricane barrelled down on Huston Texas’s energy hub and vital oil and gas facilities on the U.S Gulf Coast that serves as the nerve center of America’s energy infrastructure. However, due to heavy down pours and flooding, ten oil refinery plants were shut down according to S&P Global Platts, which normally have the capacity to refine about 2 million barrels of oil a day.  Additionally, “Texas is also a major source of refined products to the Northeast via Colonial Pipeline, and waterborne refined products and crude exports. US Gulf Coast refiners exported 2.7 million b/d of refined products in May, primarily to buyers in Latin America and Europe. USGC refiners regularly export gasoline to Mexico, for instance, and diesel to Europe,” according to S&P Global platts.

Overall, the Gulf area is home to refineries and other operations that account for a vast proportion of the nation’s capacity to turn oil into gas, diesel and other products. Harvey is also expected to curtail offshore crude oil production in the Gulf of Mexico. The impact of the hurricane has seen gasoline futures spiking as energy markets respond. The average price of a gallon of regular gasoline in the U.S. has ticked up a few cents in recent days, according to AAA. The average price of gas in Texas last a week ago was US$2.136 per gallon while the current average price has climbed approximately 4 cents to US$2.173 per gallon. The national price average a week ago was US$2.334 , this compares to the current average price of a gallon of gas of US$2.368.


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