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EIA Report on Hurricane Impacts on U.S. Energy 


 As of Friday, September 5, 4:00 pm     See current        


U.S. Oil and Natural Gas Market Impacts


Prices
NYMEX Futures Prices
(for October delivery)

9/5/2008
Pre-Gustav 8/29/2008 change Week Ago
8/29/2008
Year Ago
9/5/2007
  WTI Crude Oil ($/Bbl)
106.23
115.46
-9.23
115.46
75.73
  Gasoline RBOB* (c/gal)
268.61
285.42
-16.81
285.42
199.65
  Heating Oil (c/gal)
298.28
319.19
-20.91
319.19
209.99
  Natural Gas ($/MMBtu)
7.45
7.94
-0.49
7.94
5.81
*RBOB = Reformulated Blendstock for Oxygenate Blending (RBOB), the base gasoline that needs to be blended with some type of oxygenate, now usually ethanol, to be turned into finished reformulated gasoline (RFG). Ethanol is not blended into the gasoline mixture until just before the gasoline is shipped to the retail stations.

Petroleum
As of 12:30 pm EDT (11:30 am CDT), September 5, the Minerals Management Service was reporting that about 1.2 million barrels per day (or about 90 percent) of the federal portion of the Gulf of Mexico’s crude oil production was shut-in.  As of 2:00 pm EDT (1:00 pm CDT), September 5, the Department of Energy reported that 6 refineries in the Gulf of Mexico region remain shutdown, representing about 0.9 million barrels per day of capacity, while another 6 refineries had reduced their crude oil throughput.  The 6 refineries that were shut down represent over 300,000 barrels per day of gasoline output and over 200,000 barrels per day of distillate fuel output, based on recent historical data.  Even without damage, shut-down refineries can take a week or more to return to normal operations.  Additionally, the Department of Energy was reporting that the Capline crude oil pipeline is moving crude oil from Mississippi to its termination point in Illinois, and is hoping to reopen the portion in Louisiana this coming weekend.  It was also reported that the Colonial product pipeline, which moves supply from the Gulf Coast to the East Coast, is running, but at reduced rates.  The Plantation product pipeline, another pipeline that serves the East Coast with Gulf Coast supply has acquired some generators and expects to increase flows soon.  The Centennial product pipeline, which moves supply from the Gulf Coast into the Midwest, is working on restarting its operations, according to the Department of Energy report released Friday afternoon.

However, despite the shut-in of crude oil production and refinery outages, futures prices on the New York Mercantile Exchange (NYMEX) continue to be significantly lower compared to the closing prices on Friday, August 29, before Hurricane Gustav made landfall.  Compared to last Friday, crude oil for October delivery settled $9.23 per barrel lower, while gasoline (RBOB) and heating oil were about 17 cents and 21 cents per gallon lower, respectively, at the close of trading on Friday.  Market expectations that shut-in crude oil production and refinery outages are going to be temporary continues to keep prices down, more than compensating for any pre-hurricane price increases.  Over the next few days, companies will be completing their damage assessments to petroleum infrastructure.  As long as companies continue to report no long-term damage, crude oil prices are not likely to spike significantly higher due to Hurricane Gustav. However, temporary local product supply problems could occur before refinery production and pipeline flows return to normal, which could result in increased retail prices in some areas.

Natural Gas
As of 12:30 pm EDT (11:30 am CDT), September 5, the Minerals Management Service was reporting that nearly 5.9 billion cubic feet per day (or nearly 80 percent) of the federal portion of the Gulf of Mexico’s natural gas production was shut-in.  As of 3:00 pm EDT (2:00 pm CDT), September 5, the Department of Energy (DOE) reported that infrastructure assessments continue, and there have been no reports of damage to pipeline or production infrastructure. Temporary generators continue to supply power and compression at Henry Hub and gas is flowing. Henry Hub is a key point for spot and futures natural gas trading in the United States.  Further, there have been no reports of major damage to natural gas processing plant facilities. As of 2:00 pm EDT (1:00 pm CDT), the DOE reports that 14 natural gas processing plants, each with capacity in excess of 175 million cubic feet per day, have resumed operations at either reduced or normal levels.  In addition 10 plants, remain shut down, but are ready to operate once power is restored and/or gas flow commences.  Several plants report that clean-up and restoration of facilities continue and that there is no timeline of when facilities will return to service.  



Also see:
Hurricane Situation Reports from DOE's Office of Electricity Delivery & Energy Reliability
STEO Hurricane Analysis (pdf)

 

 

Hurricane Gustavís Path
as of 0500 EDT, September 2, 2008
maps courtesy of iMapData and Pennwell

Gulf of Mexico Oil & Natural Gas Facts
Energy Information Administration
Gulf of Mexico
Total U.S.
% from
Gulf of Mexico
Oil (million barrels per day)
  Federal Offshore Crude Oil Production (4/08)
1.35
5.16
26.15%
  Total Gulf Coast Region Refinery Capacity (as of 1/1/08) 
7.41
17.59
42.12%
Natural Gas (billion cubic feet per day as of 2007)
  Federal Offshore Marketed Production
7.67
NA
NA
  State Offshore Marketed Production
0.67
NA
NA
  Total
8.33
54.7
15.22%

State Energy Profiles
Louisiana
Mississippi
Texas



Archives
Hurricane Gustav
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September 3, 2008 Report
September 2, 2008 Report
September 1, 2008 Report

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