United States releases 1mn barrels of strategic petroleum reserve

United States releases 1mn barrels of strategic petroleum reserve

"This is a really old fashioned panic in the product market", said Donald Morton, senior vice president of Herbert J. Sims & Co., who runs an energy trading desk.

He knows the hurricane-impacted Texas coast is home to almost one-third of the nation's refinery capacity, and with the closure of eight or more refineries, production of gasoline and diesel has slowed. But the blow is being softened by huge supplies of shale.

It said however that "refiners have not reported any damage so far". "This price action goes to show that the oil market is still well-supplied thanks to America's energy renaissance and OPEC's loose quotas". "Any hiccup in U.S. refined product exports is highly disruptive to the supply chain given the dependency of nations like Mexico and other Latin American countries on the U.S.", Michael Tran, director of global energy strategy at RBC Capital Markets, told Reuters.

Gasoline futures, which reflect wholesale prices to gas stations, jumped 3% on Monday.

Sen. Edward Markey, D-Mass., urged the department this week also to release gasoline from the country's emergency gasoline reserve, which holds a total of 1 million barrels of gasoline in three locations in the Northeast: New York Harbor, Boston and Maine. In the aftermath of hurricanes Rita and Katrina, it was discovered that storm surges had damaged key treatment plants along the Gulf Coast. USA crude oil inventories fell 5.4 million barrels in the August 25 week to 457.8 million, 7.6 percent below the level in the same week a year ago. CincyGasPrices.com says local gas prices are at $2.35 per gallon as of Wednesday, up about 10 cents from last week. Past year saw severe disruptions to gasoline supply in the Southeast due to construction accidents along one of its sections.

Ask independent oil man Les Clark about the impact Kern County's oil patch will experience from the massive flooding in oil-rich Houston and he can't quite put his finger on any one thing. The glut caused oil prices to crash to $26 a barrel in early 2016. Crude oil prices could remain stable.

Shivering toddler found clinging to drowned mother in Harvey floodwaters
Flash flood warnings are in place in Louisiana this morning, as Hurricane Harvey is expected to move on to its neighbour. Beaumont police officials said the toddler was doing well and had been reunited with family.

Now, those high oil inventories are providing a helpful cushion in the aftermath of Harvey.

The EIA, or Energy Information Administration, is the government agency responsible for issuing weekly supply-demand data on oil and other energy resources in the United States.

That means the US has 61 percent more oil stockpiled than in the summer of 2008 before Hurricane Ike and 52 percent more than before Hurricane Rita in 2005.

Shrinking crude stocks and expectations for rising growth in global demand meant analysts in a monthly Reuters poll raised their oil price forecasts for the first time in six months.

In all, eleven refineries are now offline, and flooding has knocked off 18% of US refining capacity, according to S&P Global Platts.

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