The Gulf Coast and Houston are in our prayers as they face unprecedented challenges in the aftermath of Hurricane Harvey. Hurricane Harvey, the strongest Texas hurricane in 50 years, brought record rainfall and unprecedented flooding. It may take years for the area to recover and it is going to be a historic challenge for the U.S. energy sector. The storm has shut about 15% of U.S. refining, cutting fuel-making capacity output by an estimated 2.2-2.7 million barrels a day.
Although The National Hurricane Center says that Tropical Depression Nine is expected to strengthen soon, it is already impacting oil and gas production. The Bureau of Safety and Environmental Enforcement (BSEE) says that tropical depression nine in the Gulf of Mexico is causing precautionary shut-downs of offshore oil and gas operations that are in the path of the storm.
Crude oil traders not only have to grapple with the aftermath of Fed Chair Janet Yellen, but also with more storms that could impact both supply and demand. This comes after hedge funds, who started the month with a record short position, have now turn around into a record long position.
Crude oil and natural gas will be looking to deal, not only with watching the weather but also watching Fed Chair Janet Yellen in Jackson Hole, Wyoming. This as the market saw movements from the Saudi Oil Minister and trying to measure the risk of fallout from increasing tensions with the U.S. and Iranian military.
Dave Tolleris, meteorologist at WxRisk.com, said that next week we will have a storm that everyone will be talking about. While the Atlantic is a hot bed of tropical activity, Tolleris is very concerned about the development of Invest 99-L, which may be developing into a tropical depression or tropical storm today. If the storm is upgraded, it will be named Hermine, and according to Tolleris, the storm has the potential to become a category 4 Hurricane in the Gulf of Mexico next week.