Crude slips, gasoline up as storm shuts US fuel output

london — Crude oil slid and gasoline futures hit their highest since mid-2015 on Wednesday as flooding and damage from Tropical Storm Harvey shut over a fifth of US refineries, curbing demand for crude while raising the risk of fuel shortages.

Refineries with output of 4.1 million barrels per day (bpd) were offline on Tuesday, representing 23 per cent of US production, Goldman Sachs said. Restarting plants even under the best conditions can take a week or more.

“It will be a while before operations can return to normal and the US refining industry is bracing itself for an extended shutdown,” Stephen Brennock of oil broker PVM said. Brent oil, the international benchmark for crude trading, was down 50 cents at $51.50 a barrel by 1239 GMT. US crude fell 44 cents to $46.00. In refined products, price movement was more dramatic and gains increased after sources on Wednesday said Total’s Port Arthur, Texas, refinery had been shut by a power outage resulting from the storm.

US gasoline futures were up 5 per cent at $1.8732 a gallon, having earlier hit $1.9009, the highest since July 2015. Diesel futures advanced by 2 per cent to $1.6986 a gallon, having touched their highest since January at $1.7161. “Crude is always easier to replace than products,” said Olivier Jakob, analyst at Petromatrix. — Reuters