Oil prices down as US reels from Harvey

The Gulf of Mexico alone accounts for 20% of US oil production where many rigs were knocked out by the storm


Crude prices slipped back in Asian trade Wednesday as a key US oil-producing region reeled from the devastation caused by monster storm Harvey.

Harvey rolled into Texas on Friday as a Category Four hurricane, tearing down homes and businesses on the Gulf Coast, and triggering massive floods.

The storm caused the closure of many oil refineries, which analysts said would lead to bigger crude stockpiles and push down prices.

In early afternoon Asian trade, US benchmark West Texas Intermediate was down 14 cents at $46.30 while Brent crude for October eased 21 cents to $51.79.

“The effect of Hurricane Harvey has been devastating on the US,” said Sukrit Vijayakar, an analyst with energy consultancy Trifecta.

“In terms of the energy market, what needs to be seen is how soon the shut in capacity comes back on stream.”

Energy information provider S&P Global Platts said in a report Wednesday that roughly 2.33 million barrels per day of Texas’s refining capacity was still shut down.

The Gulf of Mexico alone accounts for 20 percent of US oil production, and many rigs were also knocked out by the storm.

Rain continued to pummel the area Wednesday, as emergency services battled to reach hundreds of people stranded by flooding in a massive round-the-clock rescue operation.