Hurricane Harvey likely to take a toll on oil prices!

Owing to the rapid development of Hurricane Harvey, many companies in the Gulf of Mexico shut down their oil and gas hubs and scaled back their oil production.

The gulf which contributes about 17 percent of the oil output of the US was forced to shut leading to a drop in 10 percent of the region’s oil production and 15 percent of its natural gas production. Shell evacuated its personnel from the Perdido oil and gas production platform while Exxon reduced production at its Hoover facility.

Andy Lipow, President of Lipow Oil Associates said in a statement, "There is more likely to be lots of evacuations, widespread power outages, wind damage, flooding and difficulty getting workers back to the facilities.”

Hurricane Harvey could also be responsible for increased gas prices nationwide as all refineries are expected to remain shut. GasBuddy petroleum analyst Patrick DeHaan said in a statement,”Obviously if a refinery is underwater, it can’t do a whole lot to produce gasoline. It is just a matter of time before they start curtailing production at those refineries.”

Tropical storm Harvey is expected to develop into a hurricane according to the U.S National Hurricane Center. Located about 600 km southeast of Port Mansfield, it is likely to approach the Texas Coast with storm surges and freshwater flooding.