Heavy rains and flooding from Tropical Storm Harvey threatened more oil refineries along the Louisiana coast after hammering plants in Texas, forcing Exxon Mobil Corp. (NYSE: XOM) and Citgo Petroleum to consider shutdowns.
The storm dropped back over the Gulf of Mexico on Aug. 28, sending heavy rains from Houston through to Lake Charles, La. Between five and 15 inches of rain was expected in south-central Louisiana, the National Hurricane Center said on Aug. 29.
The Gulf Coast is home to nearly half the U.S. refining capacity, and nearly 2.7 million barrels per day (MMbbl/d) , or nearly 15% of U.S. refining capacity, is already shut off. Restarting those plants even under the best conditions can take a week or more.
Louisiana is home to capacity of about 3.3 MMbbl/d; Texas has about 5.6 MMbbl/d.
U.S. gasoline futures on Aug. 29 rose 0.9% to $1.73 a gallon, and have jumped about 6% since the Aug. 23 prestorm close. Heating oil futures, a proxy for diesel and other distillates, added 0.5%.
Storm disruptions may be most keenly felt in downstream areas, depending on whether equipment is damaged. If the storms continues its path east through Houston, Goldman Sachs analysts warned that the storm’s path east through Houston risks of further refinery outages, according to an Aug. 28.“More than 500,000 [barrels per day] bbl/d of production is likely to be impacted from the South Texas region,” ESAI said in an Aug. 28 report.
SOURCE: Oil & Gas Investor
Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.