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Heavy rains caused by Harvey threaten more US oil refineries

After inundating oil plants located in Texas, tropical storm Harvey has moved to Louisiana, where it is threatening even more oil refineries. Heavy rains and flooding caused by Harvey has forced companies like Exxon Mobil Corp and Citgo Petroleum to consider shutdowns. Harvey has dropped back over the Gulf of Mexico and it is causing heavy rains, all the way from Houston to Lake Charles in Louisiana. According to the weather department, south-central Louisiana can be expected to receive as much as 15 inches of rain. This is likely to cause localized flooding in low-lying areas. It may be recalled that many of the oil refineries in the US have already been shut off due to heavy rain and flooding.

The Gulf Coast comprises around half of the total refining capacity of United States. Out of this, nearly 15 percent or 2.7 million barrels per day, has already been shut off. Authorities said that the floods will take many more days to subside, and till then the oil refineries will have to remain shut. The total production capacity of Louisiana refineries is 3.3 million barrels per day whereas Texas refineries have a total capacity of 5.6 million barrels per day. “The current disruptions are affecting both demand and supply, making it difficult to assess the impact on balances at this point,” said analysts at JBC Energy.

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