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Oil Suffers Surprise Dip after Hurricane Harvey Devastation
Aug 28, 2017 (Baystreet.ca via COMTEX) --

Oil prices were down markedly, 3.2% as of the noon hour on August 28, in spite of the impacts of Hurricane Harvey. In the aftermath experts expected that over 2 billion barrels a day of capacity would be shut down in the wake of the destruction. Oil futures analysts expect that refineries will demand less oil in the weeks that they take to come back to production. Gasoline prices were up, which will drive up costs at the pump for consumers.


Five refineries have been shut down so far, and the Gulf Coast has surrendered some 25% of its capacity. The Houston area has suffered massive flooding as rains from the storm remained heavy, and hundreds of thousands of homes have been subject to severe flood damage. The impact on refineries is yet to be examined until operations are ordered to recommence.


Exxon Mobil Corporation (NYSE:XOM) stock was down 0.40% heading into the noon hour on August 28. The company announced that it was shutting down its Baytown, Texas plant in response to the storm which has a capacity of over 500,000 barrels a day, the second largest refinery in the United States.


U.S. inventory data is expected to skew dramatically in the coming weeks and perhaps months as the closure of the Houston Ship Channel brings down imports and exports of crude oil. Ultimately the event may not result in the short term spike in oil prices that some expected.


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