MARKET WATCH: Crude up slightly before Ike hit
The average price of the Organization of Petroleum Exporting Countries' basket of 13 benchmark crudes was up 4¢ to $95.33/bbl the day before Hurricane Ike slammed the US Gulf Coast.
By OGJ editors
The average price of the Organization of Petroleum Exporting Countries' basket of 13 benchmark crudes was up 4¢ to $95.33/bbl on Sept. 12, the day before Hurricane Ike slammed the US Gulf Coast in the area of Houston.
The New York Mercantile Exchange declared force majeure on September and (remaining) August natural gas delivery contracts following Sabine Pipeline's decision to halt operations at Henry Hub, La., Sept. 12.
Because of communications problems in Houston after the storm, further market information wasn't immediately available.
The US Minerals Management Service reported Sept. 14 that 591 of 717 platforms and 92 of 121 rigs remain evacuated in the Gulf of Mexico (OGJ Online, Sept. 14, 2008). Oil production was reduced to 5,200 b/d, while gas production was down to 600 Mcfd, 0.4% and 8.1%, respectively, of normal production. The Department of Energy reported 15 refineries with total capacity of 3.86 million b/d were shut in as a result of Hurricanes Gustav and Ike. Eleven other refineries with a combined capacity of 2.63 million b/d were running at reduced rates.
According to information compiled by Friedman, Billings, Ramsey & Co. Inc. in Arlington, Va., six pipelines that typically carry 1.28 million b/d of oil products from the Houston area remained shut down on Sept. 15. A further six pipelines with 5.85 million b/d of total capacity--including the 2.4 million b/d Colonial products pipeline serving the East Coast pipeline, which resumed partial operations Sept. 14--were running at reduced rates.
Analysts reported 30 natural gas processing plants with total capacity of 14.51 bcfd were shut down in Texas, Louisiana, and Alabama as of early Sept. 14. At that time 31.4% of Texas, 10.9% of Arkansas, and 9.3% of Louisiana were without electric power.
Tanker offloadings at the Louisiana Offshore Oil Port are to resume Sept. 15, having been suspended since September 10. The Port of Houston has been closed since Sept. 11. The Gulf Intracoastal Waterway is closed, and the Corpus Christi Ship Channel and the Lower Mississippi River have limited traffic to vessels with drafts less than 35 ft.
Having delivered 380,000 bbl to Marathon Petroleum and Placid Oil, DOE said it would deliver an additional 309,000 bbl of oil from the Strategic Petroleum Reserve to ConocoPhillips' Wood River refinery and Placid Oil's Port Allen refinery. DOE has released a total of 939,000 bbbl from the SPR this month; Citgo requested 1 million bbl on Sept. 14.