Gasoline Gain and Oil Pain Spurred by Storm as U.S. Plants Shut

Motor fuel prices slipped 1.2 percent on Friday, the first decline in front-month futures in almost two weeks, after a 25 percent gain in August. Crude in New York extended declines following the worst month since March. About 4.4 million barrels a day of U.S. refining capacity remains shuttered. The government plans to supply 1 million barrels of crude from the Strategic Petroleum Reserve to a Gulf Coast plant, the first emergency release in five years.

Hurricane Harvey cut U.S. refining capacity to the lowest level since 2008 after its initial strike on the Texas coast late last week. It returned as a storm to hit Louisiana on Wednesday, bringing torrential rains that shut the biggest U.S. refinery, owned by Motiva Enterprises LLC in Port Arthur, Texas. The lack of production forced Colonial Pipeline Co. to curb flows to a link that carries fuels to the Northeast. Valero Energy Corp. and Royal Dutch Shell Plc told wholesale customers Wednesday they don’t have enough gasoline and diesel to sell.

“It is pretty significant for product prices,” Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd., said in a Bloomberg TV interview.  “Winter is coming, and we are going to enter the winter season with extremely low diesel stocks.”

Gasoline for October delivery fell 1.2 percent to $1.7574 a gallon on the New York Mercantile Exchange at 10:23 a.m. in London. September futures expired Thursday after rising for an eighth session. Front-month diesel futures in the New York Mercantile Exchange have gained 7.1 percent this week, rising to the highest in more than two years on Thursday.

West Texas Intermediate for October delivery lost 45 cents to $46.78 a barrel on the New York Mercantile Exchange, down 2.3 percent for the week. Brent for November settlement slid 44 cents, or 0.8 percent, to $52.42 on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $4.87 to November WTI.
more at: https://www.bloomberg.com/news/articles/2017-08-31/gasoline-gain-is-oil-pain-as-u-s-plants-remain-shut-after-storm

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Futures were little changed in New York, down 3.2 percent for the week. U.S. production had the biggest weekly advance since June, according to Energy Information Administration data on Wednesday, offsetting the largest decline in stockpiles in almost a year. Oil processing in China fell in July, the biggest decline for that particular month in three years, figures from the National Bureau of Statistics showed Monday. “Prices were unimpressed by the reported significant drop in oil inventories,” said Norbert Ruecker, head of commodities research at Julius Baer Group Ltd. in Zurich. “Instead, the market’s focus was possibly on robust U.S. output growth or the fact that the driving season and seasonal demand strength are set to ebb over the coming weeks.” U.S. crude output rose by 79,000 barrels a day to 9.5 million a day last week, the highest since July 2015, the Energy Information Administration reported Wednesday. Stockpiles declined for a seventh week to 466.5 million barrels. Click Read More below for additional detail.

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