Gasoline rose to a two-year high as Tropical Storm Harvey hit the U.S. Gulf coast again after already knocking out a fifth of the nation’s refining capacity. Motiva Enterprises LLC’s Port Arthur refinery, the country’s biggest, was said to be shutting because of severe flooding. The disruption helped send motor fuel as much as 3.3 percent higher in New York, while the resulting reduction in demand from plants hit by the storm kept crude near a five-week low. After drenching Texas, Harvey regained strength over the waters of the Gulf of Mexico and crashed ashore again Wednesday in southwest Louisiana, according to the National Hurricane Center. “The market focus seems to be on the quantity of refinery capacity shut-ins and potential to hit oil demand,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. Click Read More below for additional detail.
Benchmark Brent fell to its lowest level since Jan. 8 as Baker Hughes data showed American explorers last week raised the number of rigs drilling for crude to the highest in almost six months. A global slump in equities deepened on Monday, removing another pillar of support for the oil market.
“The weaker opening was a combination of the risk-off sentiment that the stock market showed, but also the rig count which continues to rise,” says Ole Hansen, head of commodities strategy at Saxo Bank A/S. “It continues to confirm that U.S. producers are in good health and will increase production as prices go up.”
U.S. drillers last week added six rigs to raise the number of machines drilling for crude to 765, the highest since Aug. 11, Baker Hughes data showed Friday. That may lead to a further increase in U.S. crude production, which breached 10 million barrels a day to the highest level in more than four decades in November.
more detail at: https://www.bloomberg.com/news/articles/2018-02-05/oil-extends-losses-as-u-s-drill-rigs-rise-to-most-since-august