US’ refinery shutdown leads to dip in oil prices

On account of storm Harvey hitting the Texas region, oil prices in the US tanked during Wednesday’s trade. This is because it cut the American demand for crude, the most important feedstock for the petroleum industry.
 
The US West Texas Intermediate (WTI) crude futures were at USD 46.35 per barrel at 0155 GMT, down 9 cents from their last close. Brent crude futures were down 7 cents, at USD 51.93 per barrel.
 
Operated by Motiva Enterprises, the largest crude oil refinery in the US was closed on Tuesday night due to flooding from Harvey. The refinery has a capacity of 6,03,000 barrels per day. In anticipation of more more rain and floods, the production was cut to 53% of its capacity at 2,25,500 bpd at the Port Arthur refinery, reported a leading research agency.
 
At least 3.6 million bpd of refining capacity are offline in Texas and Louisiana, which is nearly 20% of the total US capacity.  Meanwhile, the American gasoline prices rose to a more than two-year high of USD 1.84 per gallon early on Wednesday.