As of Monday, September 12, 5:00 pm
According to the Minerals Management
Service (MMS), as of 11:30 September 12, Gulf of Mexico
oil production was reduced by 860,636 barrels per day as a result
of Hurricane Katrina, equivalent to 57.38 percent of daily Gulf
of Mexico oil production (which is 1.5 million barrels per day).
The MMS also reported that 3.784 billion cubic feet per day
of natural gas production was shut in, equivalent to 37.84 percent
of daily Gulf of Mexico natural gas production (which is 10
billion cubic feet per day).
EIA released its monthly 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
As of the close of trading on Monday, September 12, crude
oil prices were down slightly, while petroleum product futures
prices were down substantially, compared to the closing prices
from Friday, September 9. The gasoline near-month futures price
was down by 8.6 cents per gallon from Friday, settling at 187.4
cents per gallon, while the heating oil near-month futures price
was down 8.2 cents per gallon, settling at 181.4 cents per gallon.
The NYMEX West Texas Intermediate (WTI) crude oil futures price
was down $0.75 per barrel from Friday, settling at $63.33.
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.
On September 12, DOE released the weekly Gasoline
and Diesel Fuel Update. As of September 11, the average
weekly retail gasoline price decreased to $2.95 (down 11.4 cents
from the previous week). Diesel fuel prices decreased 5.1 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.
The natural gas futures price for October delivery was down
$0.23, to $11.03 per million Btu (MMBtu), as of the close of
trading today, Monday, September 12. In trading on the Intercontinental
Exchange, the Henry Hub spot price was $10.67 per MMBtu, down
$0.36 from Friday, September 9. This price is 84 cents above
the average spot price of $9.80 per MMBtu for the week ending
Friday, August 26, before the storm. At market locations across
the Gulf region, price decreases today ranged up to $0.63 per
MMBtu with an average decline of $0.29 per MMBtu. The overall
average decrease in price was $0.16 per MMBtu.
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 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. According to the Minerals Management
Service, shut-ins as of September 2 totaled 49 Bcf.
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. 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) is expected to be at
100 percent of capacity by the end of this week, after Port
Fourchon becomes operational. More than 10 percent of the nation's
imported crude oil typically enters via the LOOP.
El Paso reported damage to both its Tennessee Gas Pipeline and
Southern Natural Gas system that affects a total of 1.25 Bcf/d
in capacity. Approximately 3 billion cubic feet per day was
initially shut-in on El Paso's three natural gas pipeline systems
in the Gulf of Mexico as a result of Hurricane Katrina. Currently,
there are 700 million cubic feet per day (MMcf/d) of production
shut-in on Tennessee Gas Pipeline (TGP) and 550 MMcf/d on Southern
Natural Gas (SNG). ANR Pipeline has returned to full capacity.