«Harvey» is not raised oil prices: the market expects a quick resumption of production

© REUTERS / Rick WilkingПоврежденный in the storm Harvey oil tanker in Texas. 26 August 2017«Harvey» is not raised oil prices: the market expects a quick resumption of production© REUTERS / Rick Wilking

World oil prices are rising after the suspension of some deposits in the U.S. because of the hurricane in the Gulf of Mexico, as it is expected a quick recovery of production, and short-term disposal of these volumes is not critical at the current level of global production and reserves of «black gold», according to respondents RIA Novosti experts.

Bureau of safety and environmental control of the United States (Bureau of Safety and Environmental Enforcement, BSEE) said on Sunday that the production of more than 20% of oil and 25% natural gas in the Gulf of Mexico remains paralyzed by hurricane «Harvey».

However, as of 16: 00 MSK price of November futures on North sea petroleum mix of Brent increased by 0.1%, to 52,05 USD per barrel. The price of October futures for WTI declined by 0.76% to 47,49 dollars per barrel.

The factor of overproduction

Overproduction of oil in other countries is a strong factor influencing prices than production cuts in the U.S., says the analyst of «Sberbank CIB» Valery Nesterov. «Price reduced by counter movements, if increasing the oil production from other producers, and it is growing. The factors of overproduction, these factors are stronger and outweigh the reduction of production in the Gulf of Mexico,» he said.S&P analyst Alexander Gryaznov also believes that the effect of «Harvey» on oil prices is insignificant. The expert does not exclude that after the final assessment of damage from the hurricane, the price of WTI crude oil may slightly grow.

Minor loss

Waiting for the return of oil production in the US in the near future, experts indicate that the hurricane «Harvey» as a result of a marginal impact on the volume of reserves of «black gold» in the world.

«The market took just 0.38 million barrels per day, it’s not such a large amount. Moreover, it is expected that restoration of production will occur in about a week,» said Grushovenko.
In turn Gryaznov of S&P paid attention to the prices of petroleum products. «We see that due to the closure of a key refinery gasoline futures in the U.S. has increased by about 10%. Defrosting of the plant after a temporary closure requires more time than defrosting the oil rigs, so the reaction in oil prices was more,» he says.

«Harvey» became the most powerful hurricane in the U.S. over the past 12 years, since the country in 2005 was hit by the storm Katrina, which led to the flood in New Orleans in Louisiana. Hurricane «Harvey» on Friday hit the coast of the Gulf of Mexico, his force amounted to four points on a scale. On Saturday, he weakened to the level of a tropical storm.

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