A new $2.2 billion oil…
The OPEC deal was not…
Oil and gas supplies to the Southeast United States could be compromised as Hurricane Matthew makes its way to Florida and neighboring states, “weakening” from a category 4 hurricane to tropical storm.
The precise effects of the storm on infrastructure and supplies are largely unknown and will depend on the amount of damage the high winds will unleash on electrical lines, gas stations and pipelines.
“If there are widespread power outages, you can run into supply issues. And ahead of the storm, if motorists are going to flood the pumps, that could be a problem, too,” Patrick DeHaan, senior analyst at GasBuddy.com said. Local media are already reporting a half dozen gas stations out of gas, as drivers defensively stock up in preparation, and evacuation measures begin.
The hurricane hit the eastern tip of Cuba last night as 8 p.m. local time, with winds whipping away at 130 miles per hour, according to the National Hurricane Center.
Citizens fled to the supermarkets to buy non-perishable food items that would tide them over for a few days before state and federal aid starts go into effect.
Governor Rick Scott of Florida and Governor Nikki Haley of South Carolina urged, and, in some cases, mandated that coastal communities evacuate.
"This is not something that we want to play with," Haley said. "The worst-case scenario is that you get stuck on the coast and have no place to go."
Hurricane Matthew is the strongest storm to hit the region since 2007, when category 5 Hurricane Felix delivered 160 mph winds and caused the deaths of over 130 people.
Natural disasters have a long history of disrupting oil and gas production and supplies.
In 2008 Hurricane Ike crashed into the Gulf Coast, knocking about 700,000 barrels per day of oil production offline in the Gulf. It also forced several refineries to close their doors, dropping gasoline production by around 300,000 barrels per day.
Hurricane Rita in September 2005 struck the Gulf Coast as well, only a month after Hurricane Katrina, forcing many oil platforms offshore to close down. More than 34 million barrels of oil were not produced because of the two hurricanes, equivalent to about 6 percent of a year’s worth of production.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…