Harvey pushes oil prices higher – Australia News

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Tropical Storm Harvey’s effect on the energy industry is spreading worldwide as flooded US refiners and closed fuel pipelines squeeze national supply.

The storm, which lashed Louisiana with rain on Thursday, has pummelled the US Gulf Coast and Texas, forcing the closure of about a quarter of US refining capacity.

Benchmark US gasoline prices were more than 26 per cent higher on the week, and the premium of front-month contract to the second month hit a nearly five-year high.

On Thursday, the US Energy Department said it would release two batches of oil from the Strategic Petroleum Reserve, totalling 1 million barrels, to supply the refineries that are still running in an effort to stem fuel shortages.

The US Department of the Interior’s Bureau of Safety and Environmental Enforcement said that about 13.5 per cent of oil production in the Gulf of Mexico was shut due to the storm.

The total shut-in is about 24 per cent of US refining capacity, almost equal to Japan’s daily consumption.

Concerns over fuel shortages ahead of the US Labor Day extended weekend were also mounting.

US gasoline futures rose as high as $US2.1705 per gallon for the first time since 2015, while Energy Secretary Rick Perry warned that pump prices would rise.

Average US retail fuel prices have surged by more than 10 US cents per gallon from a week ago, the American Automobile Association (AAA) said.

The Gulf makes up nearly half of total refining capacity in the United States, the world’s largest net exporter of refined petroleum products, and the storm is expected to affect global flows.

The closures rattled global fuel markets, and European and Asian traders diverted millions of barrels of gasoline and…

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