Gas prices hit a 2-year high as crude futures fell due to flooding’s from Hurricane Harvey shuts U.S. refineries

Iran gas production

The price of gas touches a two-year high on Thursday’s session. This is after a quarter of refineries in the United States were shut down due the flooding’s from tropical storm Harvey. However, the price of crude oil dropped once again due to weak demand.

Looking on crude, global benchmark for oil prices Brent crude futures edged down more than 0.4 percent or 19 cents to finish at $50.67 per barrel. U.S. West Texas Intermediate (WTI) crude prices slipped about 0.3 percent or 12 cents to settle at $45.84 per barrel from the previous session.

In contrast, the price of crude fell because refineries in the U.S. have weakened the demand for the most significant feedstock in the industry of petroleum. As the market fears the supply of gasoline will be squeezed, gasoline futures in the stateside almost notched a 2-year high of $1.935 a gallon on the day.

Last Friday, Tropical Storm Harvey wreaks havoc on the U.S. Gulf Coast and it nearly ripped the heart of the U.S. petroleum industry as Texas and Louisiana were the ones who are badly affected by the storm. There are about 4.4 million barrels per day (bpd) of offline refining capacities. According to the calculations of Reuters, this is almost a quarter of the whole U.S. capacity. Some estimates also suggest that almost $100 billion economic losses are from Hurricane Harvey.

According to ANZ bank, the biggest refinery in the United States was closed down due to the flooding’s caused by the disastrous storm which paved the way of gasoline prices to a two-year high and made oil futures retreat.

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