Harvey does something rare for a major hurricane, and it could take oil prices on an unconventional ride

Hurricane Harvey's path of destruction may not drive oil prices higher, and that would be very unusual for a storm of this magnitude.

Mark Yusko, who's known for calling last year's oil crash, doesn't see the same dramatic price spike that occurred when Hurricane Katrina hit New Orleans in 2005.

During Katrina, 95 percent of oil production was crippled, and crude went above $70 a barrel. But Harvey is doing something else.

"In this case, it really skirted the offshore platforms, and it's really hitting the refineries instead. So, the refineries are all shutting down," said Yusko, CEO and CIO at Morgan Creek Capital Management, Monday on CNBC's "Trading Nation."

"That's actually going to increase stocks which are already far too high. So, you're going to see some negative pressure in the short term."

Oil fell nearly 3 percent Monday to settle at $46.57 — its worst daily performance since July 7.

Meanwhile, refinery stocks are on a tear. The VanEck Vectors Oil Refiners ETF is up nearly 5 percent over the past week — with stocks such as PBF Energy, HollyFrontier and Andeavor seeing the strong intraday performances.

Harvey is also pushing RBOB Gasoline Futures higher. Those prices spiked Monday, and are now up 9 percent over the past week.

According to Yusko, those bloated prices are temporary.

"We could see another 5 to 10 percent increase over the next couple of weeks. It would likely come back down pretty quickly after that," he said.

As for oil, Yusko is sticking with his year-end forecast which calls the commodity to be wedged in the $40 to $60 a barrel range. But due to Harvey, he now expects prices will stay at the lower end of that projection longer.

"It will take some time to get all the infrastructure back up and running. But it won't last for months or years. So, I think we'll probably have a couple of week blip, and then you'll start to see some pressure relieve there as the refineries come back online," Yusko said.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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