Refineries in some parts of Texas slammed by Tropical Storm Harvey were aiming to start back up this week, but Houston plants were producing very few products and large facilities further east were bracing for heavy rainfall and potential flooding.
Oil market analysts projected that about 13 to 16 percent of the country's capacity to refine crude oil into gasoline, diesel and other fuels was offline Tuesday. There were few reports of serious damage to refineries on Tuesday, but flooding and continued rain in Houston made it unclear when workers would be able to reach facilities.
Parts of South Texas and Louisiana remain under water or on flood watch as the Gulf Coast prepares to absorb more rain in the coming days.
NOAA Weather Forecast
Refiners Valero and Citgo are preparing to restart operations in the next few days at facilities in Corpus Christi, Texas, near where Harvey made landfall overnight on Friday as a Category 4 Hurricane.
However, analysts said weather conditions and flooding in Houston and Galveston, Texas, would keep many refiners in the area out of commission through much of the week. The region is capable of refining about 2.7 million barrels a day of crude oil, or about 14 percent of total U.S. capacity.
"They're making a very minimal amount of petroleum products if any at all. They can't get crude in, and the pipelines out are mostly shut," said Andy Lipow, president of Lipow Oil Associates.
Lipow estimates that Harvey has affected as much as 3 million barrels per day of refining capacity, or 27 percent of the U.S. total, taking into account refineries that have not shut down entirely, but throttled back operations.
Colonial Pipeline, which transports fuel from the Gulf Coast to the southeast and further north, was operating at reduced capacity due to supply disruptions from Houston area refiners. Colonial also reported storm-related damage at its Pasadena, Houston and Cedar Bayou facilities.