Analysis by Dr. Nancy Yamaguchi
Crude prices have regained the $48/b mark this morning, after closing out last week in the red. On Friday, WTI crude closed at $47.29/b, down by $0.60 for the week. The market opened a penny down in today’s post-Labor Day week, but prices trended up overnight and early this morning, reclaiming last week’s loss. Gasoline prices opened with futures contracts at $1.7509/gallon, down $0.023 from Friday’s opening.
Hurricane Harvey’s destruction continues to disrupt the lives of thousands, including those working in the energy industry. Mansfield Oil’s Operations Team reports that normalizing fuel supply is at a very early stage, with long lines at fuel terminal racks forcing drivers to wait 6 to 8 hours in some areas.
Last week, Baker Hughes was unable to present its industry-standard active rig count. The company reported that it was unable to verify rig counts in 47 counties in South Texas, with the exception of one rig’s exit.
Bloomberg has estimated that shut-in refinery capacity peaked at 4.6 million barrels per day (mmbpd.) As refineries restart, 2 mmbpd will remain offline by this Thursday. As much as 1.4 mmbpd could remain offline through mid-September. The amount of crude production lost has been small in comparison—around 0.32 mmbpd between the Gulf of Mexico and south Texas’s Eagle Ford shale play. The net impact will be an increase of crude flowing into storage while gasoline and diesel supplies remain tight.
WTI crude opened at $47.28/b this session, up by $0.20 from Friday’s opening. Currently this morning, WTI prices are $48.00/b, up by $0.72 since today’s opening. The daily price range has been $47.15-$48.15/b.
