Oil markets roiled

LONDON. Oil markets were roiled yesterday after Tropical Storm Harvey wreaked havoc along the US Gulf Coast over the weekend, crippling Houston and its port, and knocking out several refineries as well as some crude production.

US gasoline prices hit two-year highs as massive floods caused by the storm forced refineries in the area to close. In turn, US crude futures fell as the refinery shut-downs could reduce demand for American crude. Brent futures LCOc1 steadied as pipeline blockades in Libya slashed the OPEC state’s output by nearly 400 000 barrels per day (bpd).

Harvey is the most powerful hurricane to hit Texas in more than 50 years, killing at least two people, causing large-scale flooding, and forcing the closure of Houston port as well as several refineries.

The US National Hurricane Centre said Harvey was moving away from the coast but was expected to linger close to the shore today. It said floods would spread from Texas eastward to Louisiana.

Texas is home to 5,6 million bpd of refining capacity, and Louisiana has 3,3 million bpd. Over 2 million bpd of refining capacity was estimated to be offline as a result of the storm. Spot prices for US gasoline futures RBc1 surged 7 percent to a peak of $1,7799 per gallon, the highest level since late July 2015, before easing to $1,7341 by 1341 GMT.

US traders were seeking oil product cargoes from North Asia, several refining and shipping sources told Reuters, with transatlantic exports of motor fuel out of Europe expected to surge.

US traders were seeking oil product cargoes from North Asia, several refining and shipping sources told Reuters, with transatlantic exports of motor fuel out of Europe expected to surge.

“Global refining margins are going to stay very strong. If (US) refineries shut down for more than a week, Asia will need to run at a higher level, because there’s no spare capacity in Europe,” said Olivier Jakob, managing director of Petromatrix.