Record Fuel Inventories to Buffer Supply Shortfalls Caused by Harvey
$USO, $UNG, $UGA
Record Crude Oil and refined products stocks will cushion potential shortages caused by Hurricane Harvey, the International Energy Agency (IEA) said Tuesday, adding that it could release emergency oil stocks in the event of extended outages.
Some Crude Oil production and about 2-M BPD of refining capacity has been shuttered as Harvey has battered Texas, causing catastrophic flooding.
Though the IEA said Monday that it still saw no need for a release of emergency stocks, the head of the global energy watchdog’s Oil Markets Division says the organisation is monitoring the situation closely.
“If there is a continued shortfall of fuels we will act,” the IEA’s Neil Atkinson told Reuters Tuesday.
The IEA and the US Department of Energy (DOE) continue to assess the damage, but it is too early to say what action, if any, would be needed, Mr. Atkinson said.
“These are very early days. We know of refinery shutdowns and (crude oil) production that has come down. What we do not know is how long these closures will be,” he said.
Record inventories are expected to buffer any supply shortfalls.
Current US commercial stocks stand at about 1.3-B bbls, including 450-M bbls of crude, the IEA says. That excludes strategic petroleum reserves (SPR).
The United States consumes about 20-M BPD, about 50% is for Gasoline.
“Fuel stocks are very high at the moment so the issue is whether you can move fuels around and if trucks and pipelines can operate,” Mr. Atkinson said.
The Paris-based intergovernmental agency coordinates emergency fuel releases when natural disasters or war interrupt global energy supplies.
Refineries in the Gulf Coast area, which is also a major export Hub to other US regions as well as Latin America and Europe.