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Nearly half of all oil production on the U.S. Gulf Coast has been shut-in ahead of Tropical Storm Zeta, the Bureau of Safety and Environmental Enforcement (BSEE) said on Tuesday afternoon. And the oil markets are cheering.
In the latest update on the multitude of storms making their way through the Gulf Coast this year, disrupting U.S. oil production, the BSEE reports that 154 platforms in the Gulf have been evacuated—a figure that represents nearly a quarter of the 643 manned platforms residing in the Gulf.
Crude oil prices responded favorably to the latest disruption to U.S. oil production. WTI was trading up 2.39% by 4:oo p.m. EDT, to reach $39.48.
The amount of oil production shut-in as of Tuesday afternoon equates to nearly a million barrels per day.
For natural gas, more than 55 percent of all gas had been shut-in, or 1500 MMCFD.
For the day prior, only 16% of all oil production on the U.S. Gulf Coast had been shut-in.
Hurricane Zeta will be the 11th hurricane this season to hit the Gulf. It hit Mexico on Monday night, and is expected to hit the U.S. coast by Wednesday, with warnings issued from Louisiana to Florida. Oil companies are preemptively evacuating platforms.
By Tuesday, Enbridge, BP, Shell, Chevron, Equinor, had experienced disruptions to their operations.
Oil prices have been essentially rangebound for months as the market eyes an uncertain future for oil demand, and any disruptions to production—particularly in the visible U.S. market—are likely to provide at least a temporary boost.
In the other direction, a ramp-up in Libyan oil production is pressuring prices, with the market skittish about
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.