Oil prices gyrate as market grapples with U.S. hurricane damage

Oil Prices Set To Rise as Supply-Demand Gap Closes Up

That meant at least 3.65 million barrels per day (bpd) of refining capacity was offline, or 19.6 percent of total USA capacity, based on company reports and Reuters estimates.

U.S. gasoline prices rose to a more than two-year high of United States dollars 1.84 per gallon early on Wednesday. Brent crude futures were down 6 cents, at $51.94 a barrel.

Refineries with output of at least 4.4 million barrels per day (bpd) were offline on Tuesday, representing almost 24 percent of USA production, according to Reuters estimates and company reports.

The front-month contract in USA crude's benchmark West Texas Intermediate (WTI) futures settled down $0.13, or 0.3%, at $46.44 a barrel on the New York Mercantile Exchange (NYMEX).

US crude oil futures extended their slide on Tuesday while gasoline prices jumped another 3% to 2-year highs as more refineries in Texas closed in the aftermath of a weekend hurricane, amplifying concerns that crude stockpiles will balloon in the near term while fuel supplies run short.

The expected USA crude build-up on Tuesday widened the WTI discount to Brent to $5.64 per barrel, its widest in over two years.

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"Because that demand is gone that's where the selling pressure in the market is coming from", said Gene McGillian, manager of market research at Tradition Energy. The contract's peak was $1.7888, the highest for NYMEX gasoline since July 2015. Onshore, numerous nation's refineries remain offline because of heavy flooding in and around the Houston area.

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.

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

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

"The impact could linger for several weeks or longer, depending on how long it takes Texas refiners to return to normal operations", DeHaan said. 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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