US Products Outlook- Storm impact supportive to prices

NEW YORK, Aug 4 (Reuters) - U.S. oil products prices are likely to draw some strength near-term if Tropical Storm Edouard causes big disruptions to refinery and pipeline operations in the Gulf Coast, traders said on Monday.

The second named storm of the season to threaten oil operations in the Gulf of Mexico has prompted Marathon to shut its oil refinery in Texas City, Texas and caused interruptions to shipping along the Houston Ship Channel and the Sabine Pass ship channel serving Port Arthur, Texas.

Valero warned its regional refineries may be affected after Edouard halted the channels' inbound traffic. [ID:nN04419294]

Edouard "could have an impact on Gulf Coast basis and therefore ripple through the system. So far, it hasn't had much impact, but I think it could," said a Gulf Coast broker.

"As storms go, this one's pretty minimal...it should be short-lived, short of a real surprise."

The price impact of the tropical storm will hinge on where it hits, said one oil trader in the New York Harbor.

"If it hits Louisiana as a tropical storm then most likely (oil products will be) flat or come down, but if it comes in as hurricane probably run up on the screen," he said.

According to the U.S. National Hurricane Center, Edouard has about a 20 percent chance of becoming a hurricane by the time it reaches land on Tuesday, probably in Texas.

In the Gulf Coast, traders said gasoline differentials are expected to gain some strength this week on news of tropical storm Edouard.