For veteran OPEC officials, Hurricane Harvey’s impact on global oil markets is one of the strangest things they have seen.

The storm has led to some of the biggest disruptions to U.S. energy infrastructure; yet it has failed to boost crude prices.

In contrast with previous major hurricanes such as Katrina in 2005, Harvey has actually seen oil prices edge down as traders have focused more on the hit to demand from damaged U.S. refineries than the blow to supply from knocked-out production.

That is deeply frustrating for OPEC countries currently restricting oil supplies in an attempt to push prices higher.

“It seems no event will move the oil price up much,” said one OPEC delegate, surprised by the lack of impact from Harvey.

Another was also bemused after oil prices fell this week, defying too a steep drop in Libyan production due to unrest.

“It is all really strange. The sentiment of the market has changed a lot in the last 10 years,” he said.

Whether the market continues to frustrate its would-be masters remains to be seen, however, with analysts divided on whether demand from U.S. refineries will recover more quickly than U.S. production.

‘OPEC Must Be Raging’

OPEC long ignored the U.S. shale revolution that helped the world’s largest oil consumer sharply raise output and become a major exporter of both crude and products in recent years.

When it finally recognized the threat, OPEC led by Saudi Arabia embarked on a pump war with the United States aimed at hitting the high-cost U.S. industry with lower oil prices.

In the past two years, however, OPEC has restrained production to prop up prices, because the pain of cheaper barrels was putting too much stress on most members’ finances. The move has revived growth in the U.S. oil industry, with production and exports hitting new highs - until Harvey.

Unlike hurricanes Katrina or Gustav, when strong winds mainly caused damage to oil production, Harvey has also severely disrupted the U.S. refining industry and products pipelines, causing a spike in products prices.

Olivier Jacob from consultancy Petromatrix said U.S. gasoline prices were trading at levels normally equivalent to oil prices of around $84 per barrel, whereas Brent and WTI crude futures are actually at $51 and $46 per barrel respectively.

“OPEC must be raging, they’re not getting any of this (gain),” Jakob said.

‘Global Molecules’

The jury is still out, however, whether this will continue, or whether Harvey will ultimately help OPEC’s efforts to rebalance the oil market by hitting supply more than demand.

OPEC and several non-OPEC producers led by Russia have cut a combined 1.8 million barrels per day (MMbbl/d) from their output since the start of the year in the hope of bringing global oil and products stocks down to about 2.7 billion barrels (Bbbl) to 2.8 Bbbl from the current record-high of over 3 billion.

U.S. stocks have declined steeply in the past few weeks.

Investment bank Goldman Sachs, one of the most active banks in commodities trading, said it believed the market rebalancing would be slowed by Harvey as it would cut demand by 0.7 MMbbl/d in the next month and have an overall bearish impact.

ING said U.S. crude prices were set to fall as production hit by the hurricane would return quicker than demand from refineries, which remain shut due to record flooding.

But another crucial factor to bear in mind is U.S. exports.

When Katrina hit the U.S. Gulf in August 2005, the U.S. was exporting 1.3 MMbbl/d of petroleum.

Today, it normally exports between 5 MMbbl/d and 6 MMbbl/d of crude and products. According to Petromatrix’s Jakob, Harvey will help OPEC and its target of reducing stocks in the rest of the world should the current disruption to exports be prolonged.

“Ultimately, at OPEC they should care about global molecules (of oil) and in that sense Harvey is bullish even if it is bearish U.S. crude in the near-term,” Amrita Sen from Energy Aspects said.

She said that given the spike in products prices, refineries in Europe and Asia would run at top capacity, ultimately supporting crude prices across the globe.