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EIA Report on Hurricane Impacts on U.S. Energy 


 As of Monday, September 8, 4:00 pm     See current        


U.S. Oil and Natural Gas Market Impacts


Prices
NYMEX Futures Prices
(for October delivery)

9/8/2008
Pre-Gustav 8/29/2008 change Week Ago
9/2/2008
Year Ago
9/7/2007
  WTI Crude Oil ($/Bbl)
106.34
115.46
-9.12
109.71
76.70
  Gasoline RBOB* (c/gal)
275.03
285.42
-10.39
273.37
198.64
  Heating Oil (c/gal)
301.31
319.19
-17.88
307.36
214.32
  Natural Gas ($/MMBtu)
7.53
7.94
-0.41
7.26
5.50
*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 8, the Minerals Management Service was reporting that about 1.0 million barrels per day (or nearly 80 percent) of the federal portion of the Gulf of Mexico's crude oil production was shut-in. As of 10:00 am EDT (9:00 am CDT), September 8, the Department of Energy reported that 4 refineries in the Gulf of Mexico region remain shutdown, representing about 0.6 million barrels per day of capacity, while another 6 refineries had reduced their crude oil throughput. Additionally, the Department of Energy was reporting that the Capline crude oil pipeline is moving crude oil from its origin point in St. James, LA to its termination point in Illinois, although flows near the origin point are reduced. 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 now has full commercial power to the system. The Centennial product pipeline, which moves supply from the Gulf Coast into the Midwest, is back operating normally.

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 prices before Hurricane Gustav, crude oil for October delivery settled over $9 per barrel lower, while gasoline (RBOB) and heating oil were about 10 cents and 18 cents per gallon lower, respectively, at the close of trading on Monday, September 8. 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. 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 all 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 8, the Minerals Management Service was reporting that over 4.7 billion cubic feet per day (or well over 60 percent) of the federal portion of the Gulf of Mexico's natural gas production was shut-in. The Department of Energy (DOE) reported at noon EDT (11:00 am CDT) September 8, that four pipelines have no gas flow from offshore points. Flows from two of these offshore pipelines may begin within the next two days. 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. The DOE also reported that 19 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, five plants remain shut down, but are ready to operate once power is restored and/or gas flow commences. An additional four plants remain shut down with no timeline of when the 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
September 5, 2008 Report
September 4, 2008 Report
September 3, 2008 Report
September 2, 2008 Report
September 1, 2008 Report

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