The unwind of the Hurricane Harvey trade began in earnest Tuesday, as refineries and pipelines signaled that restarts had begun. WTI had its best day in more than a month and are currently up nearly $2 since Friday’s close, while gasoline prices had their worst day since June.
That trend is holding again today as Brent crude pushes north of $54 – maximum crude runs by European refiners looking to supplement the lost US supplies are cited for the strength – and WTI is back above $49 for the first time in 3 weeks. ULSD futures are following crude higher, while RBOB is falling again, down 2.5 cents at the moment.
While it will still be weeks, and in some cases months, before Gulf Coast refineries are fully back to speed, it’s clear that a large sigh of relief is making its way through energy markets that the damage to refineries and the pipeline networks they feed wasn’t worse.
Meanwhile, Hurricane Irma became the strongest hurricane to ever form in the Atlantic, and is threatening a huge area as it makes its way towards Florida. This morning’s forecast has the storm making its turn north slightly earlier than yesterday’s models, meaning the system could still threaten much of the East Coast, and lowering the threat to the Gulf Coast. It’s still too early to say however, and the race is on for those in the potential path to prepare for what could be the strongest landfall in US history as it has not even yet reached the warmest water along its path.
The lack of energy infrastructure in Irma’s path is keeping prices from being stirred up, although Weather Underground’s comparison to a similar storm from more than 50 years ago should keep the NY Harbor and the rest of the North East on notice.
Hope you haven’t gotten sick of the weather Channel just yet: Tropical storm Jose was named yesterday and is following behind Irma. Forecasts suggest this will become a hurricane in the next couple days, but early models have it thankfully staying out to sea…for now. There is also a tropical depression that’s formed in the gulf of Mexico, but models have it heading on shore in Mexico and not impacting the US.