The past week was marked by the analysis of the consequences of Hurricane Harvey, which brought quite unpleasant surprise for the oil market.

"Harvey" has become the most powerful hurricane in the United States for the past 12 years, since the storm Katrina in 2005, which led to a flood in the city of New Orleans in Louisiana. Hurricane Harvey hit the coast of the Gulf of Mexico, its strength was four points on a five-point scale.

Monday began with decline in WTI oil quotations by more than 3% due to investors' fears that demand for US West Texas Intermediate (WTI) oil, which is produced in Texas and mainly used for gasoline production, would decrease due to the inability to "digest" the proposed raw materials after the closure of the refinery in the Gulf of Mexico. The price of November futures for the North Sea oil Brent decreased by 1.31% - to 51.30 dollars per barrel. The price of September futures for WTI crude oil fell by 3.34% - to 46.26 dollars per barrel. According to Reuters, American traders paid attention to the contracts for the supply of petroleum products from North Asia.

A little later, the US Energy Ministry reported that almost the half of the Texas Gulf Coast refining, or the ninth part of the refinery capacity of all the US, was out of order because of the hurricane. On Monday, all six refineries in the city of Corpus Christi were closed. In addition, four refineries in the area of the cities of Houston and Galveston began the procedure for stopping production.

The next day, oil prices rose slightly as a part of the correction. According to Goldman Sachs, refining, rather than oil production, suffered most. News from Libya also supported the quotes. The refinery in the Lebanese city of Eze Zavia was only loaded with 50% of its capacity because of the closure of the Sharara field at the end of last week. Sharara temporarily stopped work, as the pipeline, which pushes oil from this field, was blocked by militants of the Zintan group.

In the second half of the week, the oil market, pretty shabby by the hurricane, practically recovered. The price of November futures for the North Sea oil blend of Brent brand grew by 0.71% - to 51.09 dollars per barrel. The price of October futures for WTI crude oil increased by 0.52% - to 46.20 dollars per barrel. In the course of the last week (before the hurricane) Brent crude oil traded in the range of about 52-53 dollars per barrel, WTI - about 47-49 dollars per barrel. Released data on reserves in the US showed the decrease of 5.4 million barrels, or 1.2% - to 457.8 million barrels, significantly higher than the forecast of 0.41%, or 1.908 million barrels. At the same time, oil production for the period, according to the Ministry of Energy, increased by 0.02%, or by 2 thousand barrels per day, to 9.53 million barrels per day. Oil reserves at the country's largest terminal in Cushing increased by 0.7 million barrels, amounting to 57.2 million barrels.

On Friday, OPEC, who was silent until then, expressed surprise at the situation. It was an unpleasant surprise for the cartel's representatives that Harvey did not push world oil prices to increase. Reuters cites two quotes that accurately characterize the current state of the oil market. According to one of them, already no event can significantly push the price of oil. The second unnamed interlocutor called the situation very strange and stated that over the last ten years the mood in the market has changed a lot.

 

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