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Brent prices were down on Monday morning after investors shied away from crude oil markets and instead turned to safer-haven gold futures after North Korea conducted its sixth and most powerful nuclear test over the weekend.
WTI Crude, the U.S. benchmark, was holding steady, up 0.38 percent at US$47.47. Trading in crude futures today is expected to be thin due to the Labor Day holiday in the U.S.
Gasoline futures, in the meantime, were down more than 4 percent early Monday morning, as Texas and Louisiana’s petroleum industries are slowly coming back to life. Before and after Hurricane Harvey hit Texas and Louisiana last week, more than 20 percent of the U.S. refining capacity had shut down, including the biggest and second-biggest refineries in the U.S.—Port Arthur and Baytown. A major fuel artery to the East Coast, the Colonial pipeline, also shut down last week.
As of 2:30pm EDT on Sunday, September 3, Colonial Pipeline assessments were ongoing, and as such, “the current estimated restart between Houston and Hebert has been updated to Monday, September 4 for Line 2 (distillates), and Tuesday, September 5 for Line 1 (gasoline),” the Department of Energy said in its latest update on the aftermath of Hurricane Harvey. Currently, only Texas operations are down, and the remainder of the Colonial system continues to operate with available supply, the DOE said.
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Seven refineries have begun the process of restarting after having been shut down, but this process could take several days or weeks, depending on whether any damage is found during restart. According to public reports, at least four refineries in the Gulf Coast were operating at reduced rates, the DOE noted.
In offshore production, some 5.5 percent of the current oil production of 1,750,000 bpd in the Gulf remains shut-in, which is equal to 96,260 bpd, the Bureau of Safety and Environmental Enforcement (BSEE) said on Sunday, compared to more than 20 percent of Gulf oil production shut-in immediately after Harvey made a landfall in Texas last weekend.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.