Barclays said in the coming weeks, they expect Harvey’s impact to make it harder for OPEC to rebalance the market and maintain bullish sentiment.

Disruptions to refineries, production and trade will also make the weekly EIA data even noisier and less useful as a high frequency indicator at the very time OPEC needs it most, according to Barclays. Though production impacts may be longer lasting, demand is likely to fall sharply in September due to lack of driving-related demand.

Harvey will raise product prices nationwide, denting demand, especially in September, Barclays said. Flooding and destruction in 2005 and 2008 cut demand by more than 1 million bpd between August and September, twice as much as the month-on-month seasonal downtrend, the bank added.

(Street Color alerts are derived from real time chats with market professionals subscribed to the Ask Alyce Premium Chat on Bloomberg and Symphony. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)


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