Hurricane Harvey devastation hits oil markets
Production at several refineries in state of Texas set to come to a halt
by Abi Moses on 29th August, 2017 if ($blog_item->blog_updated_date != '0000-00-00 00:00:00'): ?> and updated 30th November, -0001 12:00am endif; ?>
The impact of Hurricane Harvey is being felt on crude markets as investors consider the effects it has had on Texas' onshore and offshore oil production.
The USA's top oil-producing state has been devastated by Hurricane Harvey, leading to production in Houston coming to a halt – 13% of the country's entire oil production is currently shut down.
Motiva Enterprises are considering closing their refinery in Port Arthur. The 603,000 barrel-per-day site is the largest crude oil refinery in the US and any halt to production will be a huge blow. Owners, Royal Dutch Shell and Saudi Aramco are set to make a decision later today regarding production in Port Arthur.
Royal Dutch Shell have already closed its Deep Park refinery and chemical plant as the state of Texas continues to feel the impact of Hurricane Harvey's devastation.
Analysts at Julius Baer believe the storm-related damage is "manageable" but said, "Energy markets are pondering the impact of hurricane Harvey, which hit the heartland of the US energy business over the weekend. Historically, storm-related prices have been temporary and short-lived. According to initial estimates, Harvey fits the average hurricane impact suggesting that distortions should disappear within two or three weeks, although the floods remain a wild card."
Global Brent crude futures were trading at $51.45 per barrel, down 0.85% and US West Texas Intermediate futures were down 0.11% at $46.52 per barrel.
According to JP Morgan, the catastrophic level of storm damage caused by Hurricane Harvey will put it alongside Hurricane Katrina as the two biggest pay-outs by insurance companies in US history.