MOSCOW (MRC) -- Oil prices slipped on Friday in the wake of Hurricane Harvey, which has killed more than 40 people and brought record flooding to the oil heartland of Texas, paralyzing a quarter of the US refining industry, reported Reuters.
Harvey, downgraded to a tropical storm and losing steam as it moved inland, shut at least 4.4 MMbpd of refining capacity.
That sparked fears of a fuel shortage before the Labor Day weekend and cut refinery demand for crude, widening the spread between US gasoline and crude.
This gasoline "crack spread" hit a high of USD27.79 a barrel on Friday, up USD10 in a week.
Brent crude for November was down 40 cents at USD52.46 a barrel by 1350 GMT. The Brent contract for October, which expired on Thursday, closed up USD1.52 at USD52.38.
US crude was last down 40 cents at USD46.83 a barrel. The contract rebounded 2.8% on Thursday but is heading for a weekly decline of around 2%.
"Natural disasters generally are negative over the medium term due to demand destruction, but in the short term the market reacts to the shortage of supply," said Jason Gammel, oil and gas analyst at US investment bank Jefferies.
The US government tapped its strategic oil reserves for the first time in five years on Thursday, releasing 1 MMbbl of crude to a working refinery in Louisiana.
An adviser to President Donald Trump told a White House briefing more oil could be released from reserves.
"We would be very comfortable tapping into that," homeland security adviser Tom Bossert told reporters.
US crude oil stocks fell sharply last week as refineries raised output with the approach of Harvey, the Energy Information Administration said.
The oil market outside the United States remains well supplied with ample production by the Organization of the Petroleum Exporting Countries.
As informed earlier, 29 August, benchmark European gasoline refining margins spiked nearly 9% to their highest since April after more than 2 MMbpd of US refining capacity was knocked offline by Hurricane Harvey. Harvey knocked out 13% of refining capacity in the US, the world's largest oil consumer, while the continuing rain and flooding threatened other units, including the country's largest refinery, it was said then.
MRC