Update #1
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.
Regards,
George Murphy
Twitter@GeorgeMurphyOil
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