Gasoline Spikes To 7-Month Highs After Harvey; Heating Oil, Crude Jump
Bloomberg reports that as a result of Harvey, which was the strongest storm to hit the U.S. since 2004, some 2.26MM b/d of crude, condensate refining capacity in Texas remain shut while nearly 300,000 Texas customers are without power as of 12:30pm CDT. Major terminals and pipelines that move crude and fuel into and out of Houston-area refineries were also shut, potentially stranding some crude in West Texas and starving New York Harbor of gasoline.
“Gasoline prices are going to continue to rise this week as we expect another three days of rain in the Houston area,” Andy Lipow, president of consultant Lipow Oil Associates LLC in Houston, said by telephone.
“With pipeline operators beginning to shut down their crude oil and refined product infrastructure, I expect to see further curtailment of refinery operations, resulting in less product being available. A spike in gasoline and diesel prices will drag up crude oil prices.”
The Oct. Nymex RBOB-WTI crack spread has spiked to $19.94:
NatGas and Heating Oil are also up:
And just in case it wasn’t obvious, prices will likely rise “just because of worries, but the real impact might not be clear for a couple of days,” Michael Lynch, president of Strategic Energy & Economic Research told Bloomberg.
For now, the RBOB curve implies the system will be affected for at least 3 months…
