No oil, gas supply disruption from Ida
Storms hits Alabama after minimal Gulf damage
Tom Stundza -- Purchasing, 11/10/2009 12:02:57 PM
Crude oil prices continued to trade around $79-$80/barrel this morning as Tropical Storm Ida made landfall in Alabama, after weakening steadily throughout the morning and little to no damage was done to oil and gas platforms in the Gulf of Mexico.
As reported earlier, several oil companies in the Gulf Coast shut down their production when the approaching storm still was a hurricane. In fact, the U.S. Minerals Management Service reports that nearly 30% of the oil and gas production-the equivalent of a daily output of 385,000 barrel of crude oil and 1.9 trillion cubic feet of natural gas-has been shut down.
Also, companies evacuated 126 of 694 manned production platforms (18.1%) and eight of 66 drilling rigs (12.1%) currently operating in the U.S. Gulf of Mexico's federal waters, the Minerals Management Service says.
Wire services are reporting that workers will start being brought back to the rigs and platforms later today. Most offshore oil rigs in the Gulf won't show any damage, Jim Rouiller, senior energy meteorologist at private forecaster Planalytics tells Reuters. "I think that by tomorrow it will be normal operations across the production region," he says. "Ida isn't expected to cause any lasting oil industry facilities damage," the London-based brokerage PVM Oil Associates says in a client note. "The storm has been downgraded to unpleasant from nasty and everything should be up and running again by mid-week."
Meanwhile, the Energy Department doesn't expect oil refineries will need to borrow crude from the Strategic Petroleum Reserve. The emergency oil stockpile, which was created by Congress in the mid 1970s after the Arab oil embargo, holds about 725 million barrels of crude in underground salt caverns at four storage sites in Texas and Louisiana.
Energy says in a statement it won't have to provide crude "since refineries are holding above average stock levels and refinery utilization of 81% is average or less than average."
Gulf Output of Chemicals, Energy Still Down
10/16/2008Gulf Coast preps for storms
06/05/2007U.S. Gulf oil output forecast reduced
05/05/2009Oil to stay pricey this summer
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