Oil up After Harvey Fallout; Hurricane Irma Heads into Caribbean

Oil prices rose on Wednesday as strong global refining margins and the reopening of U.S. Gulf Coast refineries provided a more bullish outlook after sharp drops due to Storm Harvey.

Brent LCOc1 had gained 28 cents to $53.66 a barrel by 0952 GMT. U.S. West Texas Intermediate (WTI) crude futures Clc1 were up 15 cents at $48.81.

“Hurricane Harvey was bearish for crude and speculators went massively short WTI but now there is a reversal to positions pre-Harvey. Strong margins are helping underpin crude … gasoil is at its highest point this year,” Olivier Jakob of Petromatrix consultancy said.

Many refineries, pipelines and ports that were knocked out by Harvey 10 days ago are restarting. As of Tuesday, about 3.8 million barrels per day (bpd) of refining capacity, or 20 percent of the U.S. total, was shut. This compares with 4.2 million bpd at the height of the storm.

Focus was also being drawn to the Category 5 storm Hurricane Irma, which is barrelling towards the Caribbean and Florida and could knock out other refineries and cause more fuel shortages.

Around 250,000 barrels of daily refining capacity in the Dominican Republic and Cuba lies in the immediate path of Irma, Thomson Reuters Eikon data showed.

Fuel storage data due on Wednesday from the American Petroleum Institute and on Thursday from the Energy Information Administration is expected to give a better view of the extent of Harvey’s impact on U.S. fuel inventories, although analysts say it will take a few weeks longer to get a complete picture.

There is also another tropical storm on Irma’s heels in the Atlantic, and another one active in the Gulf of Mexico.

Longer-term, the oil industry outlook is for ample supplies and low prices as crude output remains high in the three biggest producing regions: Russia, the Middle East and North America.

read more/source: https://uk.reuters.com/article/uk-global-oil/oil-up-after-harvey-fallout-hurricane-irma-heads-into-caribbean-idUKKCN1BH04A

Related Posts

ATA Truck Tonnage Index Unchanged in February

American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index was unchanged in February after increasing 0.4% in January. In February, the index equaled 115.3 (2015=100) the same as January. “February was the first month that the index didn’t increase since July,” said ATA Chief Economist Bob Costello. “Despite a string of gains, the index is still off 1.8% from March 2020. The index is also off 4.2% from the all-time high in August 2019. It is important to note that ATA’s data is dominated by contract freight, not spot market. “Demand for trucking freight services remains strong, but for-hire contract carriers are capacity constrained due to the driver and equipment markets. The spot market has been surging as these carriers can’t haul all of the freight they are asked to move,” he said. “So the fact that the tonnage index hasn’t fully recovered is a supply problem, not a lack of demand. Other ATA data shows that for-hire carriers are operating around 7% fewer trucks, both company and independent contractor equipment, than prior to the pandemic.”

Numbers Driving the Optimism in Trucking, Then and Now

Growth in the U.S. economy boomed in 2018, slowed in 2019, and turned south in 2020 when COVID-19 started to spread widely in March. In 2019, trucks shipped 72.5% of all domestic tonnage, including an increase of 366 million tons over 2018. Also, across the northern and southern borders, trucks moved three-quarters of the value of trade between the U.S., Canada, and Mexico. Compared with previous recessions, trucking fared far better than the overall economy as the recession in the first half of 2020 was concentrated in the much less freight intensive, services sector. At the start of 2020, the U.S. remained in the longest economic expansion on record with the unemployment rate at 50-year lows. In the three primary categories of freight—retail, manufacturing, and housing construction—only manufacturing was struggling from an industry-specific recession in 2019. In January, retail sales notched a record high, and construction on new homes surged to its highest level in over a decade, according to the Census Bureau. Even manufacturing showed signs that it bottomed out in 2019, as the Institute for Supply Management’s Purchasing Managers Index reported an expanding manufacturing sector in January and February after 5 months of contraction.

Key Currency Exchange Rates for Friday, 12/15/23

American Dollar to Canadian Dollar = 0.747092; American Dollar to Chinese Yuan = 0.140842; American Dollar to Euro = 1.094792; American Dollar to Japanese Yen = 0.007058; American Dollar to Mexican Peso = 0.057816.
Back To Top
×Close search
Search