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Oil investors brace for turbulence in Harvey's wake but chaos could mean crude rises

The hurricane has been the most powerful to hit the US state in half a century..
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The global market is heavily reliant on what goes on in the US Gulf Coast

Oil investors are bracing themselves for a turbulent week as Hurricane Harvey continues to tear through Texas - the core of the US oil industry.

The hurricane has been the most powerful to hit the US state in half a century, causing massive floods, killing at least two and leaving 300,000 customers without electricity.

And rain is set to continue through at least to Wednesday meaning the disruption looks sure to continue.

Brent crude and the US benchmark West Texas Intermediate (WTI) have been affected by events in Texas and the US Gulf Coast. Around 13% of the refining capacity for the US has been halted in the light of the horrendous weather.

This has caused prices of both benchmarks to fluctuate higher and lower. Brent crude is now at $52.35 a barrel - up 0.42%, while WTI is at $46.63 - up a tad- 0.13%.

Refinery closures has shifted gasoline futures higher however, as it makes the product harder to come by and thus priced higher.

LS Gasoil for September delivery is up 0.206 at $485.25, yet futures for crude oil have fallen.

Brent for October delivery is down 0.077% and WTI futures for the same month are down 0.151% at $46.50 a barrel.

The global oil market is heavily dependent on the US Gulf Coast.

Analysts suggest that the latest disruption will eventually shift through to a rise in crude prices having been hovering round the $50 mark for some time.

Especially in the light of the International Energy Agency (IEA) this month saying that global demand will outpace previous estimates for 2017.

Barclays highlighted the spread between the discount between US  WTI against Brent crude in the wake of Harvey, which has seen it spread to over $5 a barrel - the widest in more than two years.

"Harvey has widened the Brent-WTI spread to almost $6, but North Sea maintenance, new disruptions, and higher US output were already driving the spread wider," scribes at the bank reportedly said.

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