Gasoline prices hit two-year highs as massive floods caused by the storm forced refineries across the U.S. Gulf Coast to shut down.
Monster storm Harvey slammed into a key USA oil-producing region disrupting output amid the devastation, but crude stocks are high enough that the impact on the industry should be short-lived, experts said Monday.
Harvey, the most powerful hurricane to hit Texas in more than 50 years, was set to dump more rain on Houston on Monday, worsening flooding that has paralyzed the country's fourth biggest city.
Texas supplies 5.6 million bpd of crude refining capacity, while Louisiana is home to 3.3 million bpd.
The impact on crude production is lower than the refinery impact, with about a million barrels per day offline, or about 11 percent of total USA output, according to Goldman Sachs.
Among stocks, Marathon OilMRO.N, Valero Energy VLO.N and ConocoPhillipsCOP.N were up about 1.3 percent.
A decade ago, before the ramp-up in shale output, the Gulf accounted for closer to 30% of US crude output, noted Michael Tran, analyst at RBC Capital Markets, in a Monday note.
The storm caused the closure of many oil platforms in the Gulf, and about a fifth of the region's oil output remained shut down, according to USA authorities.
Governor activates entire Texas National Guard in response to Harvey
So far, Brennan-Martin's home and immediate neighborhood remains dry, but he and his wife did have to evacuate his father-in-law. Meanwhile, Indian External Affairs Minister Sushma Swaraj posted a tweet saying 200 Indian students were "marooned" in floods.
Crude production was also affected, but to a lesser degree.
International Brent crude futures were down 7 cents at $51.82 a barrel, having traded as high as $52.19 and as low as $51.36 earlier in the day.
But what the Gulf of Mexico lacks when it comes to the energy production share of the market, it makes up for it in refinery activity.
As a result, the discount of US WTI versus Brent surpassed US$5 per barrel, its widest in more than two years.
The oil chart is looking increasingly ominous as the August lows give way in WTI crude.
USA stock index futures were little changed on Monday as Tropical Storm Harvey barreled into the Texas coast, the heart of the US energy sector, raising concerns about the impact of the storm on the economy and piling more pressure on the dollar, which hit 16-month lows against a basket of currencies.
If U.S. oil production is little affected, there could be excess crude as refiners stay shut and don't process crude to produce fuel.