Oil prices climb as Hurricane Harvey makes its way towards Texas


Oil refineries in Texas have been damaged by hurricanes before (Source: Getty)

Oil prices were up this morning as fears over a massive storm approaching the US coast intensified.

Brent crude was up 0.91 per cent at $52.52, while US benchmark WTI was up 0.88 per cent at $47.85, building on gains earlier this week as a result of declining US crude inventories.

Hurricane Harvey has grown into what could be the biggest storm to hit the US mainland in more than a decade, and it's expected to arrive on the coast of Texas, between Houston and Corpus Christi, today. 

The US National Hurricane Centre said: "Harvey is expected to be a major hurricane at landfall, bringing life-threatening storm surge, rainfall, and wind hazards to portions of the Texas coast."

Floods could reach heights of up to six to 12 feet above ground level, the organisation added.

Oil refineries in the area have begun shutting down ahead of the extreme weather, with the disruption to production causing prices to rise - US gasoline prices have gone up by almost 10 per cent since Wednesday. 

“Damage and flooding to refineries and shale fields, disrupted production in the Gulf of Mexico and infrastructure damage are unlikely to be bearish for WTI,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA.

Meanwhile, Kit Juckes at Societe Generale warned: "Hurricane Harvey is approaching Texas and threatening to do worse than tear up a few bars."

Tags: Oil prices