A total 48 offshore platforms in the Gulf of Mexico were evacuated because of Hurricane Gordon as of Wednesday, with almost 160,000 bpd of crude oil production shut in along with a little over 266 million cu ft of gas production, the Bureau of Safety and Environmental Enforcement said in its daily update on developments in the area. The data was based on platform operator reports submitted on Tuesday, when Gordon was expected to make landfall.
The shut-in production represents less than one-tenth of GOM's total daily oil output, and price movements reflected the relative insignificance of the shut-ins, with West Texas Intermediate closing at almost a week's low yesterday, at US$68.72 a barrel, down 1.7 percent.
"Gordon largely turned out to be a non-event for the energy market, and if anything, the sell-the-news aspect of the tropics trade has triggered a profit-taking pullback across the space," MarketWatch quoted the co-editor of the Sevens Report, Tyler Richey as saying.
Unlike the 2017 hurricane season that caused serious production outages in the Gulf of Mexico and at Gulf Coast refineries, this year's hurricanes are thought to be fewer and weaker. Colorado State University recently revised its forecast for the number of named storms this season to 11 from 14, as per a Bloomberg report from July. Related: Are Oil & Gas Executives Paid Based On Luck?
Separately, meteorologists from AccuWeather predicted the formation of an El Nino in August, which will reduce the likelihood of tropical storm formation. AccuWeather expects between 10 and 12 named storms this season, and between 2 and 4 major hurricanes. Colorado State University expects just one storm to develop into a major hurricane.
With 20 percent of U.S. crude production capacity and 45 percent of refining capacity in the Gulf of Mexico, storm forecasts are important for oil traders-bulls and bears alike. Last year storm losses hit US$200 billion, the highest storm bill in history, with three major hurricanes-Harvey, Irma, and Maria-pummeling the Gulf of Mexico.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More