Harvey -- Wasn't He An Invisible Rabbit? -- August 29, 2017

Factoids

Annual rainfall:

• Houston: 45.28 inches
• Portland: 44 inches
• Seattle: 37 inches

Harvey: 50+ inches

Updates

September 2, 2017: gasoline availability continues to improve in north Texas. 

August 31, 2017: Colonial pipeline shut down due to Hurricane Harvey.

August 30, 2017: US crude oil inventories dropped significantly.

August 30, 2017: WTI continues to fall: prolonged shutdowns from Harvey could strand shale output -- Bloomberg.

A few more days isn’t a problem, according to Libby Toudouze, a partner at Cushing Asset Management LP. But if the Gulf Coast closures continue into and past next week, it could spur a ripple effect across the industry.

Marathon Petroleum Corp.’s Galveston Bay refinery in Texas City, with a capacity of 451,000 barrels a day, may be forced to halt production within several days because it is running out of crude, a person familiar with operations said on Monday. Its oil comes via Magellan Midstream Partners LP, which suspended use of its pipeline in the area on Sunday.

Later, 9:45 p.m. Central Time: the "Houston" story is incredible; 52+ inches of rain; category 4 hurricane; and get this: right now, on the news:

• nine dead due to the storm (of course, more bodies will be found) but nine dead at this point in a metropolitan area of 5 million? truly incredible
• looting? none to speak of; and Houston is not fooling around; life sentences for "burglars" during a "crisis"; minimum prison sentences a given
• dislocated, living in shelters? 12,000. Compare to Katrina
• no significant damage to refineries is being reported
• an absolutely incredible story 

Original Post

 

It looks like every news outlet is finally getting to the oil story and Hurricane Harvey. Might as well try to consolidate them in one place, starting with some earlier posts:

• Hurricane Harvey "tests" US shale -- WSJ -- August 29, 2017 (earlier today)
• hurricanes Katrina, Rita, and Harvey tell US shale's story -- Bloomberg -- August 28, 2017 
• (yesterday)
• tropical storm Harvey continues to dump water on Houston, WTI at $46.72 -- August 28, 2017
• how will Hurricane Harvey effect US crude oil supplies? -- August 28, 2017
• somewhat related, Venezuela -- August 28, 2017
• after Hurricane Harvey, WTI flat to slightly down -- August 28, 2017

Now, the new stories, with comments:

Harvey sends gasoline prices climbing, deepens Venezuela's suffering -- Washington Post -- August 29, 2017. This story has so many story lines, one could blog any number of posts -- but succinctly:

• we're not in Kansas any more: folks thinking the oil sector is where it was when Katrina struck have been under the Geico Rock for the past five years
• the Bakken shale revolution changed everything
• the US SPR is no longer needed: we have the Permian, the Eagle Ford, the Bakken, the Marcellus, and the Utica -- just to start, and much more after that
• gasoline prices climbing -- give me a break: 10 - 15 cents/gallon, tops. Compare this to what an OPEC embargo would mean -- $1.00 to $1.50/gallon to begin, then rationing and maybe worse
• Venezuela suffering: oh, give me a break. Venezuela has more problems than a few VLCC's in queue off the LOOP

Finally, a way to lower CO2 emissions, by cutting electric power  -- Bloomberg has this one figured out.

• Homes hit worse by Hurricane Harvey may not have electricity for months
• lower utility bills for the homeowners, Bloomberg might have added
• solar panels would not have helped
• Jim Polson, the writer, should have a blog

Harvey's toll on energy industry shows a Texas vulnerability --

• actually the NY Times got it wrong: it's a national vulnerability
• the only reason the oil industry's infrastructure is located along the coast(s) of Texas and Louisiana is because no other states are willing to help out

First, they tell us that the shale industry cannot respond to a national disaster like Hurricane Harvey, now they tell that the shale boom softened the energy blow from Harvey -- CNN Money

California: some talking head on CNBC earlier today said that gas prices would go up across the US. First, as mentioned above, gasoline prices might go up 5 - 15 cents/gallon, but nothing compared to what an OPEC embargo of the 1980s would have done. But this is even more interesting: the hurricane in Texas should have no effect on gasoline prices in California. California is an island; the state doesn't get oil from Texas and the state formulates its own gasoline at in-state refineries. If the price of gasoline rises in California, someone is taking advantage of the situation.  

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Another Country Singer 

If there was ever any doubt that Linda Ronstadt was a country singer, those doubts are erased in this music video. The pedal steel gee-tar is heavily featured throughout the concert.

 

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The Poll

Tomorrow morning I could be tied up. I don't want any cheating on the poll -- in which we asked whether US crude oil supplies would increase/decrease. Survey shows:

• yes, there will be a drawdown; the number will come in under 463.2 million bbls of crude oil: 52%
• no, there will not be a drawdown; the number will be greater than 463.2 million bbls: 48%

Wow, talk about close.

August 30, 2017: the drawdown was huge.