The Global Petroleum Perspective.
Potentially major threats to the global economy - optimists say these are only temporary - are emanating from two important sources: US economic nationalism and protectionism in international trade (as explained later on in the following pages). With almost a quarter of US refineries shut down due to Hurricane Harvey, WTI and globally-traded crude oil marker Brent of the North Sea's UK sector on Aug. 30 retreated again, while American gasoline prices rose to $2/g for the first time since 2015. October WTI crude oil settled at $45.96, down $0.48 or -1.03% and November Brent crude oil finished at $50.73, down $0.93 or -1.80%.
At least 4.4m b/d of US refining capacity was shut down. Prices during the rest of Aug. 30 and on Aug. 31 continued to decline as US crude oil inventories continued to rise at a rate of about 1.4m b/d. At the same time, a squeeze in US gasoline supply triggered a jump in the prices of motor fuels throughout the American market.
Comparing Harvey's to 2005's Hurricane Katrina, oil traders said this one was far worse in terms of the floods which not only covered the whole of Houston and the critical parts of coastal Texas and Louisiana, as it will take several months before all petroleum [crude oil & natural gas] production could be brought back to normal.
In other news, was EIA's weekly report on US commercial crude oil stocks had fallen by 5.39m barrels to 457.77m barrels in the week-ending on Wednesday Aug. 16. The report showed US gasoline demand had jumped to 9.846m b/d in the previous week as US refining utilisation rates rose to 96.6%, the highest percentage of capacity since August of 2015. But it should be noted that the EIA data were collected well before Hurricane Harvey hit the US Gulf Coast.