Harvey, the most powerful hurricane to hit Texas in more than 50 years, killed at least two people, caused large-scale flooding and forced closure of Houston port and several refineries.
“The real test will be tonight when energy markets open for electronic trading and we see in numbers how bad markets believe the situation is”, Patrick DeHaan, a senior petroleum analyst at GasBuddy, said Sunday.
James Williams of WTRG Economics cautioned that additional refinery shutdowns could occur in the coming days, and that could mean a bigger hit to oil production.
“If you need gas, get it”.
As residents of Texas continue to deal with the aftermath of Hurricane Harvey, the effects of the storm are starting to reverberate across the country in the form of higher prices at the gas pump.
There might also be around 300,000 bpd of onshore US production shut in, trading sources said. Those hurricanes also temporarily disrupted refining capacity.
As a precautionary measure, 105 of the 737 offshore oil rigs in the Gulf of Mexico were evacuated before the storm made landfall on Friday, according to the Bureau of Safety and Environmental Enforcement (BSEE).
And while many may be wondering if the culprit behind the price adjustments have anything to do with Hurricane Harvey in Texas, McTeague said that here in the Pacific Northwest, the recent price increase – as well as the impending drop – can be pinpointed on another culprit: Last week’s solar eclipse.
Prices in NY were on track for the worst August since 2011, dropping below two key levels this month – the 100-day and 200-day moving averages.
Hedge funds decreased their WTI net-long position – the difference between bets on a price increase and wagers on a drop – by 21,467 to 252,974 futures and options in the week ended August 22, data from the U.S. Commodity Futures Trading Commission show. This is seen as short term resistance.
Spot prices for USA gasoline futures surged 7 per cent to a peak of US$1.7799 (RM7.59) per gallon, the highest since late July 2015, before easing to settle at US$1.7123, up more than 3 per cent. “That has not occurred yet'”.