U.S Loses 2.2mb/d Crude Oil To Hurricane Harvey

U.S Loses 2.2mb/d Crude Oil To Hurricane Harvey

The United States of America has lost some 2.2 million barrels per day of crude oil to Hurricane Harvey.

According to S&P Global Platts, the natural disaster has claimed 2.2mb/d of the country’s refining capacity.

Forbes said due to the storm that belted the southern Texas coast and drove into Houston over the weekend, Houston-area refineries began closing down on Sunday due to flooding, while refineries in Corpus Christie, located closest to Harvey’s prime impact zone, closed down at least 12 hours before the storm made landfall.

Although refiners have not reported any damage so far, however, according to Platts, at least 1.9 million barrels per day of oil refining capacity is still on hold.

Pipelines delivering oil and gas out of Texas have also been clogged, with Platts listing three big ones on Sunday.

The Magellan Midstream pipeline suspended operations on their BridgeTex and Longhorn pipelines. The two pipelines carry a combined 675,000 barrels of crude per day out of the Permian Basin in Texas to the Gulf Coast to be refined into fuel. BridgeTex runs from Colorado City in the Permian Basin to the Houston Ship Channel and has a capacity of 400,000 barrels a day. Longhorn transports 275,000 barrels a day of crude from the Permian’s Midland to the ship channel, according to Forbes.

Kinder Morgan shut down “select systems” of its 300,000 barrels per day crude pipeline in Texas. The company is also implementing a partial shutdown of its Double Eagle, Texas Gas Pipeline, Texas Natural Gas Pipeline and the Texas Interstates systems, the report said.

One of the bigger lines, Colonial Pipeline, said it does not expect any operational issues from the tropical storm, Harvey. Colonial’s gasoline-only pipeline runs all the way from Pasadena to Greensboro, North Carolina, which ultimately connects to a send and third line going on up to New Jersey for a combined total of more than two million barrels a day. These lines are in good shape, still, Platts says.

On the trade front, fuel products supplies should tighten because of Harvey, with major Gulf Coast ports in Corpus Christi and Houston still closed to vessel traffic as of late Sunday. That makes it harder for oil imports to arrive via those ports, where traditional refining capacity is waiting to turn that crude into gas and jet fuel, Platts added.

PIRA Energy Group, a unit of S&P Global Platts, estimates Texas’ total crude export capacity to be 2.5 million barrels a day, of which 930,000 daily comes from Corpus Christi/Brownsville while 910,000 barrels come from the Greater Houston area.

The Environmental Protection Agency had also issued temporary waivers for parts of Texas required to use reformulated fuels under the Clear Air Act to ensure ample supplies of gasoline and diesel. The Texas Commission on Environmental Quality asked the EPA for waivers for gasoline and diesel in 30 of Texas’ 254 counties. The waivers are in effect until September 15 but could be extended, according to Platts.

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