A hurricane in the heart of the US energy industry is set to curtail near-record US oil production for several weeks, with the impact expected to reverberate throughout the country and across international energy markets.
Harvey hit the Texas shore as a fierce category 4 hurricane, causing massive flooding that has knocked out 11 per cent of US refining capacity, a quarter of oil production from the US Gulf of Mexico, and closed ports along the Texas coast.
Gasoline futures jumped as much as seven per cent to their highest level in more than two years in early Monday trading in Asia as traders took stock of the storm's impact.
The outages will limit the availability of US crude, gasoline and other refined products for global consumers and further push up prices, analysts say.
Damage assessments could take days to weeks to complete and the storm continues to drop unprecedented levels of rain as it lingers west of Houston, home to oil, gas, pipeline and chemical plants. And restarts are dangerous periods as fires and explosions can occur.
So far, the federal government has not announced if it will release barrels of oil or refined products from the nation's Strategic Petroleum Reserve (SPR), which holds nearly 680 million barrels of oil.
"This is not like anything we have ever seen before," said Bruce Jefferis, chief executive of Aon Energy, a risk consulting practice.
It was too soon to gauge the full extent of Harvey's damage to the region's energy infrastructure, he said.
More than 76cm fell in the Houston area in 48 hours and a lot more rain is forecast.
The storm was felt from coastal ports to inland oil and gas wells. Oil producers in the Eagle Ford shale region of south Texas have halted some operations.
At least four marine terminals in the Corpus Christi area, an export hub for energy deliveries to Latin America and Asia, remained closed due to the storm.
Texas refineries could be offline for up to a month if their storm-drainage pumps became submerged, he said.
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