Hurricane Harvey wreaks havoc on US oil sector

The US oil sector has taken a hammering after huge floods across Texas caused by tropical storm Harvey forced several refineries in the region to close, knocking down global oil prices.

US West Texas Intermediate (WTI) stocks were down 2.7% at US$46.57 a barrel on Monday, while Brent crude fell by 1.3% to trade at $51.75.

US gasoline prices surged by 7% to a peak of $1.7799 per gallon as the prospect of reduced inputs into Texan refineries loomed large in the market.

In the wake of the hurricane, which is still expected to linger Eastward into Louisiana on Tuesday, oil pricing group S&P Global Platts said at least 10 refineries have been or are in the process of being shutdown.

It has been estimated that around half of the region’s refining capacity has been halted by the storm. Texas is home to 5.6 million barrels per day (bpd) of refining capacity, while Louisiana has 3.3 million bpd.

Sources have also suggested that the operators of the Motiva Port Arthur refinery in Texas, the largest refinery in the US, are considering a shutdown.