Europe's gasoline exports set to surge on Harvey outages

Randall Padilla
September 3, 2017

More than 18 percent of oil production in the Gulf of Mexico was shut down, the U.S. Department of the Interior's Bureau of Safety Environmental Enforcement said.

"It's a chilling effect on the refining industry, which is a dire state right now", DeHaan said.

Its impact is felt further down the line, when oil leaves the state.

But some crude oil pipelines had restarted. Once in the Midwest, it's either turned into products like gasoline, or it's sent down to refineries in the Gulf - the very ones halting their operations due to the storm.

"The upside to Bakken producers, and those in Colorado and Wyoming, is they still have access to rail infrastructure", she said.

With a key source of crude demand on hold, analysts and traders expect the amount of crude oil in storage to pile up over the next few weeks, reversing a trend that ignited hope a global rebalancing in the oil market was gaining traction. The company will have to replace the crude later.

The massive storm not only shut down refineries, it also forced the closure of the Colonial Pipeline, which moves petroleum to the southeast U.S. Shipbrokers said flows to NY will be the highest since November, when a pipeline blast curbed inflows from the Gulf of Mexico.

There is little doubt that Harvey has complicated the efforts by OPEC and its allies to force global inventories lower, but if they respond by tactically allocating different grades of crude among customers, it could still work to their benefit.

Though worldwide conflict frequently causes "flight-to-quality" buying, many analysts are also looking at our weak US dollar as a compelling reason to replace paper assets with history's most solid store of value.

These blends are less expensive to produce and could therefore help to curtail extreme price increases at the pump. "It's just virtually impossible at this time to get the gasoline that's available to the markets where it's needed because of flooded roads and pipelines that are down and power outages". "This impact is starting in Texas, where the average price for unleaded gas has already jumped up two cents since Tuesday (Aug. 22) to $2.15/gallon".

Cincinnati-area gas stations are raising prices, as the price of wholesale gasoline futures soars.

Stations in Dallas and San Antonio, Texas are closing because they can not get gasoline right now. The average for a gallon of regular gasoline has risen from about $2.35 a week ago to $2.45 now, AAA reported. He told the outlet that this included reports of people charging $99 for a case of water, hotels marking their prices up aggressively and gas going for between $4 and $20 per gallon in some instances.

Motor fuel prices slipped 2.3 percent in NY on Friday amid signs some U.S. Gulf refineries are preparing to restart operations. That action may have been the latest trigger drawing both speculators and longer-term investors toward gold, which is now this year's best investment category, outpacing stocks, bonds, and most other commodities.

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