• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 12 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 4 hours Visualizing How Much Oil Is In An Electric Vehicle (Hint: a heckuva lot)
  • 4 hours Theresa May to Step Down
  • 5 hours Look at the LONGER TERM bigger picture of international oil & gas. Ignore temporary hiccups.
  • 15 hours Total nonsense in climate debate
  • 16 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 15 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 18 hours Will Canada drop Liberals, vote in Conservatives?
  • 19 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 19 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 15 hours Apple Boycott in China
  • 11 hours Australian Voters Reject 'Climate Change' Politicians
  • 2 hours Why is Strait of Hormuz the World's Most Important Oil Artery
The Threat In Iraq Is Being Overblown

The Threat In Iraq Is Being Overblown

As Iraq has been drawn…

The Oil Price Tug Of War

The Oil Price Tug Of War

Oil markets have been relatively…

Hurricane Michael Shutters 700,000 Bpd Of Oil Production

rig

Hurricane Michael hit the Florida Panhandle with winds of 155 mph yesterday and is now moving north, albeit as a weaker, tropical storm. The hurricane shut in more than 40 percent of oil production capacity in the Gulf of Mexico, according to data from the Bureau of Safety and Environmental Enforcement, as well as almost 32 percent of gas production capacity.

A total of 89 platforms were evacuated by the time Michael made landfall on Wednesday, as well as seven drilling rigs, with shut-in production totaling almost 718,900 bpd. Some 813 million cubic feet of natural gas production has also been taken offline this week.

Despite the high portion of shut-in capacity in the Gulf, the chances of it affecting prices in any meaningful way are slim: most of U.S. production comes from onshore reserves, so the 40 percent of GOM capacity not producing this week represents just 6 percent of the total national production capacity.

Meanwhile, Michael has become the third-strongest storm in U.S. history, wrecking northwestern Florida and killing two people, one of them a child as it felled trees and flooded coastal towns.

All in all, this year’s hurricane season was supposed to be milder than last year’s. In 2017, the worst hurricane to hit the U.S. coast was Harvey, which shut down about one-fifth of national refining capacity, causing major buildups in crude oil inventories. The shutdowns came a few weeks before many refineries were scheduled to undergo maintenance, and some were forced to do so as they had delayed regular maintenance work for weeks and even months.

Related: BP Chief: Saudi Arabia Is Holding Back Production

For this year, Colorado State University earlier revised its forecast for the number of named storms this season to 11 from 14.

With 20 percent of U.S. crude production capacity and 45 percent of refining capacity in the Gulf of Mexico, it is easy to see why storm forecasts are important for oil traders—bulls and bears alike. Last year the bulls had reason to celebrate (although they probably didn’t do so openly) as storm losses hit US$200 billion, the highest storm bill in history.

By Irina Slav for Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News