HOUSTON, T.X. — Oil markets are in a bit of turmoil today after Hurricane Harvey brought destruction to the U.S. Gulf Coast over the weekend.
According to Reuters, the most powerful storm to hit Texas in 50 years crippled Houston and its port, knocking out several refineries and crude oil production facilities.
Gasoline prices in the U.S. hit two-year highs as massive floods caused by the storm forced refineries to close. That in turn caused the benchmark price of West Texas Intermediate crude to fall as the refinery shutdowns could reduce demand for American crude.
Meanwhile, the price of Brent crude rose as pipeline blockades in Libya slashed that country’s output by nearly 400,000 barrels per day. The discrepancy between the crude oil benchmarks West Texas Intermediate and Brent is now $5.21 per barrel, the widest in two years.
Texas has a total of 5.6 million barrels per day of refining capacity, while neighbouring Louisiana has 3.3 million bpd of capacity. Over 2 million bpd of refining capacity is estimated to have been put offline because of the storm.
Story courtesy Reuters: http://www.reuters.com/article/us-global-oil-idUSKCN1B802D.
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