Crude prices dipped on Tuesday as the market grappled with the shutdown of some 13 percent of refining capacity in the United States after a hurricane ripped through the heart of the country’s oil industry.
The refinery closures helped push U.S. gasoline futures RBc1 to a two-year high of $1.7799 per gallon on Monday, although they had receded to $1.7030 by 1158 GMT on Tuesday.
International Brent crude futures LCOc1 were 32 cents lower at $51.57 per barrel, having traded as high as $52.19 earlier in the day.
U.S. West Texas Intermediate (WTI) crude CLc1 edged down 5 cents to $46.52 a barrel, after falling more than 2 percent in the previous session.
The damage assessment could lead to more volatility. Some refineries were preparing for restarts, but heavy rains are expected to last through Wednesday, adding to catastrophic flooding in Houston.
“Refineries in Asia should run much harder to make up for (U.S. closures), which is supportive for Brent,” said Olivier Jakob, managing director of oil analysis firm PetroMatrix.
Still, Jakob warned that the scale of U.S. upstream outages was not yet clear, and extensive damage on oilfields or pipelines could boost WTI prices.
Tropical Storm Harvey, which has been downgraded from a hurricane, hit oil refiners harder than crude producers.