Sun, Sep 10, 2017 - Page 14 News List

Oil tumbles as Hurricane Irma imperils demand

Bloomberg

When Harvey shut down Texas refineries and ports late last month, Mexico, the US’ biggest customer, quickly made alternate plans for supply.

In July, 72 percent of Mexico’s gasoline sales came from imports. With the quick route from the US Gulf Coast shut off, the trading arm of Petroleos Mexicanos PMI booked vessels to haul fuels like gasoline and diesel from Europe, the Caribbean, Asia, Canada and the rarest origin of them all: New York.

Typically a fuel importer, New York Harbor was tapped to supply fuel-thirsty Mexico. The tanker Largo Sun loaded and set off for Tuxpan on Mexico’s East Coast.

However, that ship is in a holding pattern, with Tuxpan closed as Hurricane Katia strengthens on its way to the coast.

“Pemex was ahead of the game,” said Sandy Fielden, director of research and commodities for Morningstar Inc. “They’ve got a bunch of cargoes on hand.”

However, now, with the hurricane shutting ports, “they’re going to get hit with higher prices,” he said.

Oil market news:

‧ The US oil rig count dropped by three to 756 rigs, the lowest level since June, data from Baker Hughes Inc showed on Friday.

‧ Russia should follow Mexico in using financial instruments to lock in future oil revenue as producers confront growing risks from cyclical price moves, Goldman Sachs Group Inc said.

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