U.S. gasoline futures jumped 4 percent while crude prices were mixed on Tuesday after a hurricane shut down more than 19 percent of the country’s refining capacity, curbing fuel production and further bloating crude inventories, Reuters reported.
Gasoline rose still higher post-settlement, after sources told Reuters that Motiva was shuttering the largest U.S. refinery. That meant at least 3.65 million barrels per day (bpd) of refining capacity was offline, or 19.6 percent of total U.S. capacity, based on company reports and Reuters estimates. The Gulf is home to nearly half of U.S. refining capacity.
“Because that demand is gone that’s where the selling pressure in the market is coming from,” said Gene McGillian, manager of market research at Tradition Energy. “We have no idea when (the refineries will) come back on, the market is taking a wait and see approach.”
U.S. West Texas Intermediate (WTI) crude CLc1 edged down 13 cents or 0.3 percent to $46.44 a barrel. International Brent crude futures LCOc1 closed up 11 cents or 0.2 percent to $52.00 a barrel. The discount for U.S. WTI versus Brent reached $5.92 a barrel on Tuesday, its widest in more than two years. CL-LCO1=R
U.S. gasoline futures RBc1 jumped 4 percent to settle at 1.7833, the highest in more than two years.