UPDATE: US Gulf Coast gas operations brace for Hurricane Harvey
Reuters—Oil and gas prices rose on Friday as the US petroleum industry braced for Hurricane Harvey, which could become the biggest storm to hit the US mainland in more than a decade.
Hurricane Harvey became a Category 2 storm as it crossed the Gulf of Mexico with winds of 110 mph (175 kph), 145 miles (235 km) off port O'Connor, Texas, the US National Hurricane Center said.
The hurricane is forecast to make landfall late Friday or early Saturday between Corpus Christi and Houston, Texas. The area is home to more than 45% of the nation's refining capacity and a large percentage of its gas processing capacity and chemicals production, as well as many oil and gas drilling rigs.
UPDATE: The US government said 23.2% of US Gulf Coast (USGC) natural gas production (approximately 748 MMcmd) and 22% of USGC crude oil output capacity (approximately 377 Mbpd) has been halted because of the storm, as of around 14:00 CST on Friday.
In south Texas, energy companies including Royal Dutch Shell, Anadarko Petroleum Corp. and ExxonMobil Corp. have pulled workers from offshore oil and gas platforms and halted onshore drilling in south Texas.
The Port of Corpus Christi, Texas, was also closed to vessel traffic, a spokesperson for the city's Port Authority said.
"Damage and flooding to refineries and shale fields, disrupted production in the Gulf of Mexico and infrastructure damage are unlikely to be bearish for WTI," said Jeffrey Halley, market analyst at brokerage OANDA.
Louisiana and Texas have issued disaster declarations, authorizing the use of state resources to prepare for the storm. The US National Hurricane Center expects Hurricane Harvey to move slowly over Texas and linger over the state for days, bringing as much 35 in. (97 cm) of rain to some areas. Louisiana could see 10 in. to 15 in. of rain.
"With this system's intensity and slow motion, it is the worst of both worlds," said John Tharp, a forecaster with Weather Decision Technologies in Norman, Oklahoma. "There will be major impacts along the coast and inland with periods of prolonged rain."
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