Heavy rains from tropical storm Harvey caused large-scale U.S. refinery outages, pushing up gasoline prices, while crude prices rose in early Asian trade on Tuesday on the back of supply disruptions in Colombia and Libya.
Refinery shutdowns from the storm helped push U.S. gasoline prices
U.S. West Texas Intermediate (WTI) crude futures
On international oil markets, Brent crude futures
Massive floods caused by Harvey forced several refineries to close along the U.S. Gulf Coast, while heavy rains were spreading into the greater Houston area, which has already been hit by catastrophic flooding.
The U.S. refinery sector was affected much more than oil producers by the hurricane, which has now been downgraded to a tropical storm. Sources have told Reuters Motiva will decide on Tuesday morning (local time) whether to shut the 603,000-barrel-per-day (bpd) Port Arthur refinery, the nation`s largest, because of high water in the plant.
"Data available so far point to sizably larger refining than production disruptions," U.S. bank Goldman Sachs said in a note to clients.
"We roughly estimate that the impact of Harvey on the U.S. oil market would be to increase domestic crude availability by 1.4 million bpd while removing 615,000-785,000 bpd of gasoline and 700,000 of distillate supplies. Larger refinery outages would increase these long crude and short product impacts," Goldman said.
In crude markets, the focus was more on disruptions in Libya and also Colombia.
In Libya, the 120,000 bpd Zawiya oil refinery was working at only half its capacity due to the shutdown at the Sharara oilfield, according to a refinery source.
Sharara, which at 280,000 bpd is the OPEC member`s largest oilfield, has been shut for around a week due to militia blocking a pipeline linking it to the Zawiya oil terminal.
In Colombia, a bomb attack by leftist ELN rebel group has halted pumping operations along the country`s second-largest oil pipeline, the Cano-Limon Covenas, sources from the military and state oil company Ecopetrol said.
The 485-mile (780-km) pipeline can carry up to 210,000 barrels per day.
For a graphic on North Atlantic storms history click - http://tmsnrt.rs/2gcckz5