Oil prices gyrate as market grapples with USA hurricane damage

Oil prices gyrate as market grapples with USA hurricane damage

About 22 percent of U.S. Gulf of Mexico oil production is offline due to Tropical Storm Harvey, the U.S. Department of the Interior's Bureau of Safety and Environmental Enforcement (BSEE) said on Sunday.

But global oil prices have continued to fall.

Like the rest of the region, Motiva has been the victim of torrential rains and floods caused by the tropical storm of Harvey.

New York, Aug 29 (Reuters) - U.S. gasoline futures jumped 4 percent while crude prices were mixed on Tuesday after a hurricane shut down more than 19 percent of the country's refining capacity, curbing fuel production and further bloating crude inventories.

At 3:09pm, WTI had fallen 0.19% on the day to $46.48 while Brent crude traded up.04% at $51.91. per barrel.

West Texas Intermediate, the US benchmark for the price of oil, has pulled far away from the global benchmark Brent, but an emailed report from London oil broker PVM said it's "only a question of time for WTI-priced USA crude oil to start strengthening against other benchmarks".

Gasoline rose still higher post-settlement, after sources told Reuters that Motiva was shuttering the largest US refinery.

As a result, the discount of US WTI versus Brent surpassed $5 per barrel, its widest in more than two years.

The national US gasoline price on Monday stands at $2.38 per gallon, up more than 5 cents from a week ago.

Gains intensified for refined products after sources on Wednesday said Total's Port Arthur, Texas, refinery had been shut by a power outage resulting from the storm.

Oil investors are bracing themselves for a turbulent week as Hurricane Harvey continues to tear through Texas - the core of the United States oil industry. Prices earlier climbed to the most since July 31, 2015, at $1.842.

Crude markets were also looking at disruptions in Libya and Colombia.

According to Goldman Sachs, refining production declined by 4.1 million barrels per day (bpd) in the USA as of 29 August, representing 23% of the total refining production. Jefferies bank said it was lowering its fourth-quarter Brent oil price estimates to $55 a barrel from $60 and its 2018 forecast to $57 from $64.

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