U.S. crude oil futures nearly 3 percent on Monday, but gasoline prices surged to two-year highs as Tropical Storm Harvey kept hammering the U.S. Gulf Coast, knocking out several refineries which backed up crude supplies and disrupted fuel production.
Massive floods caused by the storm forced refineries in the area to close. In turn, U.S. crude futures fell as the refinery shutdowns could reduce demand for American crude.
The reduced inputs to those Gulf refineries will result in an increase in crude inventories," said Tony Headrick, energy market analyst at CHS Hedging, "That outweighs the outages in crude oil production from the storm.
U.S. West Texas Intermediate (WTI) futures ended Monday's session down $1.30, or 2.7 percent, at $46.57 a barrel. Brent futures fell 66 cents, or 1.3 percent, to trade at $51.75 by 2:18 p.m. ET (1818 GMT).
The WTI discount versus Brent expanded to as much as $5.48 per barrel, its widest in two years.