U.S. oil refineries have been processing more than 17 million barrels of oil a day for the past several weeks. More than half that total, about 9.4 million barrels a day as of May, is being refined at plants along the U.S. Gulf Coast.
The tropical depression named Harvey is expected to gain force to the tropical storm level and reach the Gulf Coast of Texas by Friday with winds up to 73 mph stretching from Corpus Christi to Galveston and the Houston Ship Channel. High winds and possible flooding could force the suspension of operations at much of the Gulf Coast’s capacity.
Citgo has a 52,800 barrel per day refinery in Corpus Christi and Flint Hills operates a 296,470 barrel a day refinery there as well. Refiners in Port Arthur, Baytown, and Beaumont could also experience some flooding.
Valero operates a 293,000 barrel a day refinery in Corpus Christi along with a 225,000 barrel a day refinery in Texas City and a 197,000 barrel a day plant in Houston.
In addition to the threat to refineries, the storm could also force the closure of some of the offshore rigs and platforms in the Gulf. The U.S. Energy Information Administration has posted a map that shows where the storm is expected to make landfall and where offshore production may be affected.
The front-month contract for WTI crude oil settled at $48.17 a barrel this afternoon, up more than 1% on the day. If the storm intensifies look for crude prices to move even higher.