Hi to all,
Just an update on Hurricane Harvey and the effect it could have on gasoline and heating oil prices this week!
No doubt, you have all heard of the devastation being wrought in Texas at this hour and it's important to keep all those going through this storm on your mind tonight and for the next few days.
I am watching the markets at the moment to see how this storm will play out.
So far, as of Friday, gasoline prices are up about two cents a litre for Thursday, but markets are trading upwards another ten cents a US gallon at this hour with the potential for refinery disruptions being very strong. Electricity is out in a lot of the major refining areas of Texas at this hour and it is expected that a lot of refineries will be put out of commission for a few days while the waters recede.
Both oil imports and exports through the major Texas shipping channels are shut down. Several refineries are also offline.
While the storm made landfall several hundred miles from where Katrina and Rita made landfall in 2005, that doesn't discount the fact that upwards of five million barrels of processing in the Gulf of Mexico area may be taken out simply by the huge amount of water.
I don’t expect markets to be trading too heavy this time around as this hurricane has landed further west in the Gulf of Mexico, but the storm is also subject to swing around and land again closer to the Louisiana coast and eastern Texas which would put it closer to more refinery infrastructure that was affected during Katrina and Rita in 2005.
Gasoline will be taking a hit this week. It just remains to be seen, especially after Monday and Tuesday trading, exactly how much. I'll keep everyone up to date on the numbers as the days go by, but it's easy to say here to expect increases across the board to all fuels this week.