The prices for the crude oil remained struggling last week as backfire from the Harvey hurricane continues to weigh the market down. Texas took a beating on the recent hurricane tallying a total of 40 people dead and a massive flooding, encompassing the local oil refineries hurting the totality of U.S. refining industry.
Even with the recent downgrading from the hurricane to a tropical storm, Harvey still took a lot on its landfall and taking the oil prices a long with it. Washed up, the whole market and refinery continued to drown alongside several locations in Texas.
Oil Prices
The oil prices last week were dipping at the rumble of Harvey, the West Texas Intermediate crude was hurt on the tragedy losing as much as 1.2% at 56 cents for its October delivery. On the brighter side, the WTI manages to gain more ground and recuperated some loss last Thursday with 2.8% increase but it all vanished after they entered Friday’s market.
On the other hand, the Brent Crude’s prices for the week were also down by a whopping 1.1% to $52.27 after having to rally by 3% last Thursday as well. All-in-all the crude oil was expected to lose by 1.3% the whole week, last week. That drop will also put another brick for the fifth consecutive week of sluggish performance and meekly growth.
October deliveries for gasoline were also down by 3 cents or 1.5% to $1.75 a gallon. The steep loss and decreases last week were buoyed by a handful of refineries along the US Gulf Coast remained closed and shut after Harvey’s wrath because of possible after-effects it poses.
Analysts Speculations and Notes
Financial and banking institution Commerzbank (DE:CBKG) said that:
The US Department of Energy gave the green light yesterday for 1 million barrels of crude oil to be withdrawn from strategic reserves. In other words, refineries are paralyzed not only by the flooding but in some cases also by a shortage of crude oil due to disruptions to imports and oil production.
They also added that:
Nonetheless, US crude oil stocks will probably increase significantly in the next few weeks, as crude imports and oil production in the Gulf of Mexico should be ramped up again more quickly than crude oil processing. This could put a question mark over the reduction of the oversupply and weigh on oil prices.
While the Oil Risk Manager at Mitsubishi, Tony Nunan, said that:
The hurricane will affect refining more than production ... Production will come back faster than refining so it is just going to exacerbate the situation where there's too much oil.