Tropical Storm Harvey threatens more oil refineries

Fuel prices expected to continue to rise


Clouds from Hurricane Harvey are seen in the background as smoke rises from a burn off at an oil refinery in Corpus Christi, Texas.
Reuters Clouds from Hurricane Harvey are seen in the background as smoke rises from a burn off at an oil refinery in Corpus Christi, Texas.

HOUSTON — Heavy rains and flooding from Tropical Storm Harvey threatened more oil refineries along the Louisiana coast after hammering plants in Texas, forcing Exxon Mobil and Citgo Petroleum to consider shutdowns.

The storm dropped back over the Gulf of Mexico on Monday, sending heavy rains from Houston through to Lake Charles, La. Between five and 15 inches of rain was expected in south-central Louisiana, the National Hurricane Center said on Tuesday.

The Gulf Coast is home to nearly half the nation’s refining capacity, and nearly 2.7 million barrels per day, or nearly 15 percent of U.S. refining capacity, already is shut off. Restarting those plants even under the best conditions can take a week or more.

Louisiana is home to about 3.3 million barrels of daily capacity. Texas has about 5.6 million barrels.

Fuel prices are expected to keep rising as refining capacity remains down because of the storm. In cash trading on Monday, the spread between Gulf Coast gasoline prices and benchmark futures hit a five-year high in anticipation of constrained supply.

The full impact of the refining outages, which began last week when Harvey slammed into Corpus Christi, Texas, and is now affecting Louisiana’s refining center, remained uncertain, analysts said.

“The current disruptions are affecting both demand and supply, making it difficult to assess the impact on balances at this point,” analysts at JBC Energy wrote.


Exxon said it might begin shutting units as early as Tuesday at its 362,300-barrel-per-day (bpd) Beaumont refinery in east Texas due to high water in the plant, said sources familiar with the company’s plans. It was weighing a shutdown of its 240,000-bpd crude distillation unit and 45,000-bpd coking unit, the sources said.

The company earlier cut production at its Baytown, Texas, refinery, the nation’s second largest.

Motive Enterprises plans to make a final decision Tuesday on whether to shut the nation’s largest crude refinery as the storm pours more water into its Port Arthur, Texas, plant, two sources familiar with plant operations said. Motive said Monday that operations at the plant were “stable.”

Citgo’s 425,0000-bpd Lake Charles, La., refinery has reduced production because of crude oil shipping disruptions, Energy News Today reported on Monday. Citgo is keeping a close eye on operations, a spokeswoman said Monday night.

Previous storms substantially have affected demand, which may offset expectations for tightening refined product supply.

Compounding matters is the possible closing of the Houston Ship Channel, a prime artery for crude supplies, for an extended period of time.



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