10:11 AM, Aug 28, 2017 — Prices for gasoline surged on Monday as refiners in the Gulf Coast assessed operations in the wake of Hurricane Harvey, which has led to widespread flooding in Houston, the fourth-biggest city in the US.
Now a tropical storm that’s still dumping rain on parts of Texas, Harvey is “significantly disrupting” refining in the state, with nearly three million barrels a day of capacity taken offline, according to a report from Goldman Sachs on Monday. That’s about 17% of the country’s capacity.
“At this stage, most of the refining outages are reported as preventative, with only a few comments on minor flooding,” according to the report. “However, the slow moving nature of the storm will likely lead to these shut-downs continuing in coming days and may generate persistent damage as well.”
If Harvey tracks east toward Houston, another 850,000 barrels a day of refining capacity could be affected with outages, the analysis showed. On Sunday, ExxonMobil (XOM) said flooding led to operational issues at the Baytown Complex, while other facilities on the Gulf Coast are operating normally, the company said.
Valero Energy’s (VLO) Corpus Christi and Three Rivers sites haven’t have substantial impacts from the storm, and they are working to “evaluate infrastructure needed to resume refinery operations, in particular, port operations,” according to a statement Sunday.
On the production side, Denbury Resources (DNR) said it “suspended operations and temporarily shut-in all production at its Houston area fields, representing net production of approximately 16,000 barrels of oil equivalent per day.” RBOB gasoline jumped nearly 4%, while West Texas Intermediate was down about 0.9%.
Also, United Airlines (UAL) had more than 400 flight cancellations Monday, according to flight tracking website FlightAware. Southwest (LUV) had more than 300. Royal Caribbean (RCL) diverted a vessel to Miami and cancelled a sailing out of the port of Galveston, Texas according to its website Sunday, while Carnival (CCL) said three ships will stop in New Orleans during the next two days to allow guests to disembark and make other arrangements.