Crude oil drops in Asia despite upbeat China manufacturing PMIs

Posted September 03, 2017

Refineries with output of 4.1 million barrels per day (bpd) were offline on Tuesday, representing 23 percent of US production, Goldman Sachs said.

"That 10 million (bpd) level is just not going to happen in the next two years at least", said Anas Alhajji, an independent oil analyst and economist. "Alaska oil always comes down to California for refining anyway, unless shipped overseas", he said. "We will need to wait for the flood waters to recede in order to assess this", Halley said.

US gasoline futures rose as high as $2.1705 per gallon for the first time since 2015, while Energy Secretary Rick Perry warned that pump prices would rise.

The plants shut down include Motiva's 603,000 bpd facility in Port Arthur, Texas, the largest refinery in the country.

"There's plenty of gasoline in the state of Texas", Abbott said at a news conference.

Weather Maps Are Failing Us
Around the same time at a different location near Houston ― Clear Creek at Interstate 45 ― NWS measured 48.64 inches of rain. Almost all major watersheds in Harris County were out of banks during the peak and aftermath of Saturday night's deluge.

Global benchmark Brent crude was up 58 cents, or 1.1 percent, at $51.44 a barrel. Texas and Louisiana are home to 45 percent of total USA refining capacity.

The storm caused the closure of refineries in the U.S. oil-producing heartland, which traders fear will lead to bigger crude stockpiles and push down prices.

Valero Energy Corp's 335,000 barrel per day (bpd) Port Arthur, Texas, refinery was shut on Wednesday morning, while Motiva Enterprises' 603,000 bpd Port Arthur, Texas, plant, the largest USA oil refinery, shut Tuesday.

Gasoline margins RBc1-CLc1 climbed, as the gasoline crack spread jumped to $24.02 a barrel early in the session, the highest on a seasonal basis since 2012.

They were at $2.59 a gallon, according to motorists advocacy group AAA. "This decision will authorize 200,000 barrels of sweet crude oil and 300,000 barrels of sour crude oil to be drawn down from SPR's West Hackberry site and delivered via pipeline to the Phillips 66 refinery", DOE Spokeswoman Jess Szymanski said in the statement, which Secretary Perry tweeted. Some states, like Georgia, have seen prices rise as much as 12 cents a gallon as reduced supply has hampered distribution.

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Iran had boycotted Hajj in 2016 after deaths of more than two thousand Hajj pilgrims from different countries in Mina near Mecca. President Trump also needs to take into account the will of the Congress, where anti-JCPOA factions are strong.

The federal government is releasing a million barrels of oil from the Strategic Petroleum Reserve and experts say there is enough supply, but it will likely cost you more to fill up over the next several weeks as production returns to normal. "Three to four weeks if there has been substantial damage".

United States' biggest fuel transport system, the Colonial Pipeline, also said it would shut its main diesel, jet fuel and gasoline lines because of outages at its supply points.

In addition, a major east coast pipeline was shut down.

The market shrugged off weekly inventory figures from the U.S. Energy Department, which reflect stocks prior to the storm.

On Wednesday, industry sources told Reuters that Shell staff are reboarding the Perdido oil and gas platform in the Gulf of Mexico in preparation for a restart. It is a small release of crude for a country that uses almost 20 million barrels of petroleum products daily. Refining capacity utilization rose to 96.6 percent, the highest since 2005, a figure that will fall sharply due to massive shut-ins on the Gulf.

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Watt said he's been moved by watching everyone that has helped out in the crisis so far and is looking forward to pitching in. The team has been practicing at the Cowboys' facility in Frisco, Texas, this week.