MARKET WATCH: Hurricane's effects so far 'minimal' on oil, gas markets

By OGJ editors
HOUSTON, Sept. 2 -- Oil and natural gas prices were not as affected Aug. 29 as would normally be expected on the anticipation of a storm the size and speed of Gustav, which made landfall Sept. 1 as a Category 2 hurricane, to the south of Houma, La., about 70 miles southwest of New Orleans and 100 miles southeast of Lafayette, La., according to the National Hurricane Center. Markets in the US were closed that day due to the Labor Day holiday.

Analysts in the Houston office of Raymond James & Associates Inc. reported Sept. 2 that Gustav would have "minimal" impact on midstream operations along the Gulf Coast. They said, "While it is still too early to determine the exact magnitude of any damage and associated impact on volumes/cash flow, several partnerships are reporting short-term shut-ins and decreased pipeline throughput from diminished refining and production activity. All in, the focus will hinge on refinery utilization, as the Gulf of Mexico experienced over 2.8 million b/d of refinery capacity that was shut in due to Gustav."

They said, "Likewise, attention will also be focused on reopening several Gulf Coast ports, including the LOOP, Houston ship channel (inbound deliveries), etc. Although very preliminary in nature (and exclusive of any declarations of force majeure), we would anticipate the aggregate impact to throughput to materialize less severe vs. perception."

Production, damage reports
The US Minerals Management Service reported Sept. 1 that personnel have been evacuated from a total of 626 production platforms, equivalent to 87.3% of the 717 manned platforms in the gulf. Also, personnel from 100 rigs also have been evacuated, which represents 82.6% of the 121 rigs currently operating in the gulf.

Based on reports for operators in the gulf, MMS estimates that 100% of the 1.3 million b/d of oil production in the gulf has been shut-in. Also, 95.4% of the 7.4 bcfd of gas production in the gulf has been shut-in.

Both markets and industry await damage reports from refiners and exploration and production companies following the storm. Refiner Valero Energy Corp. reported than an initial assessment of the company's St. Charles, La., refinery near New Orleans "has found no significant structural damage to operational units."

The company's Texas refineries, at Port Arthur, Texas City, and Houston, all remain at reduced rates, Valero reported, while its Corpus Christi plants are currently operating at planned rates.

Operator Swift Energy Co. reported that an initial airplane fly-over of its coastal Louisiana properties is being coordinated to assess the impact of the storm. Swift began implementing standard shut-down procedures in its coastal Louisiana properties due to weather risks from then Tropical Storm Gustav, which was forming in the gulf. "With the subsequent strengthening and path of the storm, Swift shut in all fields in its South Louisiana area, moved all drilling rigs to safe harbor, and all personnel were safely evacuated by early afternoon on Aug. 31," the company said.

Swift said that the eye of Gustav passed about 35 miles west-southwest of its Bay de Chene field in Jefferson and Lafourche Parishes and about 50 miles west-southwest of its Lake Washington field in Plaquemines Parish. "Production from these fields and…other fields in the South Louisiana area will remain shut-in until it can be determined that a field can safely be returned to operation," the company said.

It reported, "A full inspection is planned as soon as personnel can safely reenter each field and physically inspect all the properties and facilities. No assessment can be made at this time of actual damages, or how long it will take to restart production."

Energy prices
The October contract for benchmark US light, sweet crudes closed at $115.46/bbl Aug. 29, down 13¢ for the day on the New York Mercantile Exchange. The November contract dropped 14¢ to close at $115.85/bbl.

On the US spot market, West Texas Intermediate at Cushing, Okla., was down 13¢ to $115.96/bbl. Heating oil for September gained 1¢ to $3.19/gal on NYMEX. The September RBOB contract declined 50¢ to $2.52/gal.

The front-month October natural gas contract dropped 11¢ to $7.94/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 4¢ to $8.22/MMbtu.

The average price for the Organization of Petroleum Exporting Countries' basket of 13 reference crudes lost 91¢ to $110.32/bbl on Sept. 1.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.

register:WEBCAST


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected