Gasoline prices hit two-year highs today in electronic trade after Hurricane Harvey, which reached the Texas coast last Friday, caused the shutdown of a number of refineries. Gasoline was trading at US$1.7595 a gallon, up 5.57 percent from Friday's close, but west Texas Intermediate was down 0.55 percent to US$47.73 a barrel at 6:30 AM EDT.
According to an S&P Platts report, around 2.2 million bpd in refining capacity was shut down or in the process of being shut down as of Monday morning. Refineries in the Corpus Christi area had shut down ahead of the storm, but those in the Houston area only began shutting down yesterday, prompted by the floods that Harvey brought.
Among the plants being shut down was Exxon's 560,500-bpd facility in Baytown - the second-largest oil refinery in the U.S. after Port Arthur. Shell also started shutting down its Deer Park facility, which has a capacity of 340,000 bpd, and Phillips 66 started the shutdown of a 247,000-bpd refinery in Sweeney. Texas houses some 4.944 million bpd in refining capacity.
Hurricane Harvey has also disrupted imports and exports of oil and oil products, with both Corpus Christi and Houston ports closed. EIA data for May shows that Texas imported 1.9 million bpd of the total 3 million bpd that entered the U.S. via the Gulf Coast, as well as 418,000 bpd of refined petroleum products.
As a result, Reuters reported earlier today, traders have approached refineries in Northern Asia seeking supplies of jet and diesel fuel. In addition, traders and refiners have provisionally reserved ships to carry gasoline and jet fuel from South Korea to the West Coast.
Related: Tesla Successfully Raises Funds As Cash Bleed Continues
In production, around 379,000 bpd of capacity has been idled, the U.S. Bureau of Safety and Environmental Enforcement said, which represents 21.64 percent of the 1.75 million bpd that field operators in the Gulf of Mexico pump.
Experts said that Harvey is the strongest hurricane to hit Texas in the last 50 years. The damages from the storm are yet to be calculated.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More