10 refineries close as Harvey drenches Texas energy hub

Tropical Storm Harvey is usually tearing through one of the nation’s most important energy hubs. Throughout the Gulf Coast, key refineries as well as also production facilities have been forced to close.

Rain as well as also flooding are continuing to wreak havoc on Houston as well as also the surrounding area, as well as also the rain is usually forecast to continue through the week. The devastating storm’s full impact on the region’s oil as well as also gas infrastructure won’t be known until coming days.

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Ten oil refinery plants within the Houston area as well as also Corpus Christi are shutting down because of the storm, according to a report released Sunday by S&P Global Platts. They normally possess the capacity to refine about 2 million barrels of oil a day.

in which included Exxon Mobil (XOM)‘s Baytown refinery, the second largest within the country. The campus, about 25 miles east of Houston, can process up to 584,000 barrels of crude oil per day. This particular employs about 7,000 people.

Related: Gas prices set to spike as Harvey pummels Houston

S&P estimated Sunday in which roughly 2.2 million barrels per day of refining capacity were forced offline because of the storm.

Overall, the Gulf area is usually home to refineries as well as also additional operations in which account for nearly one-third of the nation’s capacity to turn oil into gas, diesel as well as also additional products.

Harvey’s market impact became clear Sunday night when U.S. gasoline futures spiked 7% after energy markets reopened.

One factor in which could lessen the impact of Harvey’s damage: the entire world includes a glut of oil.

“As more refineries go offline, there’s less stress to the system because This particular’s well supplied,” said Rob Smith, a director at IHS Markit.

Live updates coming from sy88pgw on Harvey as well as also its toll

Harvey made landfall as a Category 4 hurricane late Friday, however was downgraded to a tropical storm by mid-Saturday. This particular continued to dump huge amounts of rain on Houston as well as also cause dangerous flooding in which could get worse.

Federal officials said Sunday in which workers coming from 105 oil as well as also gas production platforms had been evacuated. All told, 737 platforms within the Gulf are staffed with workers.

About 22% of the oil produced within the Gulf was shut down as of Sunday, according to the Internal Department’s Bureau of Safety as well as also Environmental Enforcement. in which amounts to nearly 379,000 barrels of oil per day.

The numbers were a slight improvement over Saturday, when about a quarter of oil production within the Gulf was closed.

The bureau also estimated Sunday in which about 26% of natural gas production within the Gulf has been shut.

Related: Harvey could hit the Texas economy

Harvey is usually the first major storm to seriously threaten the Gulf Coast energy sector in a while.

Hurricanes Gustav as well as also Ike in 2008, as well as Hurricane Isaac in 2012, all knocked more than 1 million barrels of Gulf oil production offline, according to the EIA. Those hurricanes also temporarily disrupted refining capacity.

Hurricanes in which land in Texas tend to have little impact on oil production, however more significant consequences for refining, according to Tom Kloza, chief oil analyst at the Oil cost Information Service.

While refineries in Corpus Christi were already closed ahead of the storm, flooding within the Houston area forced more closures Sunday.

By late afternoon, plants run by Exxon, Citgo, Petrobras, Flint Hills, Magellan, Buckeye, Shell, Phillips 66 as well as also Valero Energy (VLO) had all closed because of the storm, according to S&P Global Platts as well as also the companies.

Valero reported Sunday in which there were no “substantial refinery impacts” because of the storm. The company said This particular is usually working with government officials to figure out what This particular needs to do to resume operations.

The company’s Corpus Christi plant produces 293,000 barrels per day, while its Three Rivers plant produces 89,000 barrels.

Related: Impact Your World – How you can help

Houston also marks the beginning of the Colonial Pipeline, which transports more than 100 million gallons of gasoline, heating oil as well as also aviation fuel each day to as far as the completely new York harbor. Power outages during Hurricanes Katrina as well as also Rita in 2005 forced the shutdown of parts of the Colonial Pipeline for several days.

Kloza said in which normally refining is usually knocked offline for just a brief time, creating the impact on prices fleeting. however in which depends on the severity of the storm.

“Katrina was the exception,” Kloza said, referring to the 2005 storm in which badly damaged Gulf Coast operations.

He predicted on Thursday in which Harvey is usually likely to cause only a short-term jump in gas prices of 5 to 10 cents per gallon, though he said a 25-cent spike in a worst-case scenario was also possible.

The average cost of a gallon of regular gasoline nationwide has ticked up a few cents in recent days, according to AAA.

“You’re talking about a situation where a month coming from right now gas prices will probably be lower. however a week coming from right now they’ll be higher,” said Kloza.

–sy88pgw’s Nathaniel Meyersohn as well as also Kaya Yurieff contributed to This particular story.

sy88pgw (completely new York) First published August 27, 2017: 10:39 AM ET

10 refineries close as Harvey drenches Texas energy hub

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