As of Friday, September 9, 4:00 pm
According to the Minerals Management
11:30 September 9, Gulf of Mexico oil production was reduced by 898,161 barrels per day as a result of Hurricane Katrina, equivalent to 59.88 percent of daily Gulf of Mexico oil production (which is 1.5 million barrels per day). The MMS also reported that 3.829 billion cubic feet per day of natural gas production was shut in, equivalent to 38.29 percent of daily Gulf of Mexico natural gas production (which is 10 billion cubic feet per day).
EIA released its Short-Term
Energy Outlook on Wednesday, September 7.
Because considerable uncertainty remains regarding the extent of Katrina's damage, EIA established three basic recovery scenarios to represent a range of plausible outcomes for oil and natural gas supply over the next several months and through 2006: (1) Fast Recovery, which assumes a very favorable set of circumstances for getting supplies back to normal; (2) Slow Recovery, which assumes that significant outages in oil and natural gas production and delivery from the Gulf area continue at least into November; and (3) Medium Recovery, which assumes a path in between Slow and Fast Recovery.
As of the close of trading on Friday, September 9, crude oil prices and petroleum product futures prices were down compared to the closing prices from Thursday, September 8. The gasoline near-month futures price was down by 7.6 cents per gallon from Thursday, settling at 196.0 cents per gallon, while the heating oil near-month futures price was down 3.3 cents per gallon, settling at 189.7 cents per gallon. The NYMEX West Texas Intermediate (WTI) crude oil futures price was down $0.41 per barrel from Thursday, settling at $64.08.
Currently, there are four refineries (ChevronTexaco, located in Pascagoula, MS; ConocoPhillips, located in Belle Chasse, LA; ExxonMobil, located in Chalmette, LA; and Murphy, located in Meraux, LA) that remain shut down, and expectations are that these refineries, which represent about 5 percent of total U.S. refining capacity, could be shut down for an extended period. All major petroleum pipelines (both crude oil and refined product) are back at or near pre-hurricane capacity.
On September 6, DOE released the weekly Gasoline
and Diesel Fuel Update. As of September 5, the average weekly
retail gasoline price increased to $3.07 (up 45.9 cents from
the previous week). Diesel fuel prices increased 30.8 cents
As of September 2 (the
most recent data available), the end of the first week following Hurricane Katrina, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 6.4 million barrels from the previous week. At 315.0 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories declined by 4.3 million barrels last week, putting them below the bottom end of the average range. Distillate fuel inventories decreased by 0.8 million barrels last week, and are above the upper end of the average range for this time of year. A slight increase in high-sulfur distillate fuel (heating oil) inventories was more than compensated for by a decline in low-sulfur distillate fuel (diesel fuel) inventories. Total commercial petroleum inventories dropped by 14.9 million barrels last week, and are near the upper end of the average range for this time of year. Total product supplied over the last four-week period has averaged over 21.3 million barrels per day, or 1.5 percent more than averaged over the same period last year.
During the first week of production shut-ins owing to Hurricane Katrina, net additions to underground storage were significantly below normal. Working gas in storage as of September 2 totaled 2,669 Bcf, which is 3.7 percent above the 5-year average inventory level for the week, according to EIA’s Weekly Natural Gas Storage Report (released yesterday, September 8). The implied net injection to storage was 36 Bcf, which was slightly less than half of the 5-year average net injection of 71 Bcf for the week and about 55 percent lower than the net injection of 80 Bcf during the report week last year.
The natural gas futures price for October delivery was down $0.09, to $11.26 per million Btu (MMBtu), as of the close of trading today, Friday, September 9. In trading on the Intercontinental Exchange, the Henry Hub spot price was $11.03 per MMBtu, up $0.11 from yesterday (Thursday, September 8) and still about $1.16 per MMBtu more than the price on Friday, August 26, before the storm.
Ports and Pipelines
While the Colonial and Plantation petroleum product pipelines are back up and able to run at 100 percent of capacity, supplying the pipelines with products may become an issue as long as some of the refineries that supply product into these pipelines remain shut down or running at reduced rates. Latest reports indicate that the Dixie pipeline, which supplies propane into the Southeastern portion of the country, may be running as high as 95-100 percent of its capacity. The Capline, a major crude oil pipeline that supplies crude oil from the Gulf Coast to some Midwest refineries, is now operating at nearly 90 percent of its capacity, according to operator Shell Oil Corporation.
The Louisiana Offshore Oil Port (LOOP) was operating with two of its three berths open as of September 7, allowing it to run at about 75 percent of its capacity. More than 10 percent of the nation's imported crude oil typically enters via the LOOP.
Pipeline damage has been reported by at least two companies. Tennessee Gas Pipeline has reported that it has found damage and leaks on both a 36-inch and a 26-inch diameter line. Damage also was found on multiple lines in the South Timbalier area, according to the company. Inspections are continuing. Enbridge Inc. has reported damage to its Mississippi Canyon Corridor pipeline system, which can transport up to 800 million cubic feet a day from the offshore.