Oil prices turn lower as Harvey flooding weighs

Oil prices turned lower on Thursday, reversing the previous session’s sharp gains, as flooding caused by Tropical Storm Harvey continued to paralyze U.S. refineries of the Gulf Coast.

The U.S. West Texas Intermediate crude October contract was at $46.73 a barrel by 06:30 a.m. ET (10:30 GMT), down 50 cents or around 1.06%.

Elsewhere, Brent oil for October delivery on the ICE Futures Exchange in London declined by 39 cents or 0.74%, to $52.47 a barrel.

Record flooding in Texas caused by hurricane Harvey, now downgraded to a tropical storm, that has paralyzed at least 4.4 million barrels per day of refining capacity, according to company reports.

The U.S. Department of the Interior’s Bureau of Safety and Environmental Enforcement reported that approximately 13.5% of oil production in the Gulf of Mexico was also shut in on Thursday.

The U.S. government authorized the utilization of its strategic oil reserves for the first time in five years on Thursday, releasing 1 million barrels of crude to a working refinery in Louisiana.

Texas is home to 5.6 million barrels of refining capacity per day, and Louisiana has 3.3 million barrels.

Difficulties in the U.S. seemed to overshadow news that output from the Organization of Petroleum Exporting Countries fell by 170,000 bpd in August, as fresh tensions in Libya cut local supplies.

Elsewhere on Nymex, gasoline futures for October slid 0.71% to $1.761 a gallon.

Natural gas futures for October delivery edged down 0.16%to $3.04 per million British thermal units.