NEW YORK, July 8 (Reuters) - A double whammy of record

heat and hurricanes should test U.S. refiners' resilience in

coming weeks, raising the risk of extremely volatile fuel prices

in the middle of the peak travel season, analysts said.

The Atlantic hurricane season from June through November is

an annual threat for U.S. refineries. Half of the country's

over 18-million-barrel-per-day refining capacity is located

along the Gulf Coast, highly susceptible to tropical storms. The

U.S. is the largest fuel market in the world.

Refiners this year may have to brace for more storms than

usual. Government forecasters expect up to seven major

hurricanes in coming months, double the annual average of three

major Atlantic hurricanes with wind speeds over 111 miles per

hour.

Citgo Petroleum Corp was cutting output at its 165,000

barrel-per-day Corpus Christi refinery on Saturday and plans to

run the facility at minimum during Tropical Storm Beryl's

passage over the Texas Coast, sources said.

The largest ports in Texas also closed operations and

vessel traffic in preparation for Beryl, which is expected to

strengthen back to a hurricane before hitting the area early on

Monday.

The intensity and timing of Beryl, which at one point became

the earliest Category 5 hurricane on record, signals an active

and disruptive season ahead, said Neil Crosby, crude market

analyst at Sparta Commodities.

"Hurricanes remain the biggest wild card for gasoline

prices," said GasBuddy analyst Patrick De Haan. "No better

reminder of that than Beryl," he said.

Evacuation orders ahead of storms can lift stockpiling and

boost fuel demand, causing prices for gasoline, diesel and other

refined products to move higher, De Haan said.

If a major storm hits the Gulf Coast's refining system, it

could remove as much as a million barrels a day of fuel supply

and lead to extended outages or even permanent closures,

according to the U.S. Energy Information Administration (EIA).

Hurricanes heading for the Gulf Coast could also knock out a

similar amount of crude supply, with the offshore Gulf of Mexico

region housing around 14% of U.S. crude output.

In 2021, U.S. oil and gas companies suspended more than 1.7

million barrels oil output in the aftermath of Hurricane Ida.

Outages of around 1.5 million bpd of crude production and

refining capacity can cause gasoline prices to jump by 25 cents

to 30 cents, according to EIA.

WARMER TEMPS

In addition to hurricanes, refineries this year must contend

with more problems related to scorching heat.

The latest U.S. monthly temperature outlook foresees above

average temperatures in large parts of the U.S. in July,

typically the hottest month.

Excessive temperatures have supersized effects on commodity

supply chains, including oil and fuel, JPMorgan analysts wrote

last month.

Most refineries are designed to operate between 32 and 95

degrees Fahrenheit. Triple-digit temperatures could lead to

equipment malfunctions and reduction in refining capacity.

Extreme heat last year led to a 500,000 bpd reduction in

Gulf Coast refined products output, the JPM analysts wrote.

Similar effects are being felt this year. Unit upsets

reported by Phillips 66 at its Wood River refinery in

Illinois last month were likely due to heatwaves, according to

Kloza and other industry experts.

SILVER LINING

A robust maintenance season earlier this year allowed U.S.

refineries to undertake major upgrades and perform detailed

upkeep which had been repeatedly postponed due to surging

post-pandemic demand and supply disruptions.

That should, in theory, make refineries better prepared for

the hurricane season, said Alex Hodes, oil analyst at brokerage

StoneX.

Slow demand in recent months has also helped refineries

build fuel stockpiles, which should act as a buffer in case of

outages.

U.S. gasoline inventories have risen by about 4 million

barrels since the beginning of April to near 231.7 million

barrels by June 28, in line with the seasonal average of the

past five years excluding 2020.

Inventories of distillates including diesel and heating oil

have grown by 3.7 million barrels from the start of April and

were at 119.7 million barrels by June 28, slightly below the

historical average excluding 2020, when inventories were sharply

elevated by COVID-related demand destruction.

"There's not much margin for error," said Tom Kloza, head of

energy analysis at Oil Price Information Service. "I'm waiting

to see what happens."