U.S. oil firms fear worst as Katrina rips in

Discussion in 'Economy' started by Shattered, Aug 29, 2005.

  1. Shattered
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    Mon Aug 29, 2005 7:33 AM ET

    By Erwin Seba and Mark Babineck

    HOUSTON (Reuters) - U.S. Gulf of Mexico energy companies were contemplating their worst fears on Sunday as Hurricane Katrina, a potentially catastrophic storm, charged through offshore production areas towards south-east Louisiana.

    "We're just going to have to wait and see what's left," said Chevron Corp. spokesman Matt Carmichael.

    At least 42 percent of daily Gulf of Mexico oil production, 20 percent of its daily natural gas output and 8.5 percent of national refining capacity was shut on Sunday, producers and refiners said.

    The Gulf accounts for about one-quarter of U.S. oil and natural gas production.

    U.S. oil futures shot up by $3.81 to $69.94 a barrel on Sunday after briefly hitting a record high $70.80 in Asian trade. Unleaded gasoline futures spiked by 22 cents a gallon to a record high $2.15.

    Likewise, heating oil futures shot to $2.0060, up 16.74 cents from Friday's close.

    At least 633,000 barrels of daily crude production out of an daily average of 1.5 million barrels was shut on Sunday, although the total likely was higher.

    The amount of known shut production is expected to increase on Monday because several companies do not release production cuts to the media, but only provide them to the U.S. Minerals Management Service, which was moving its Gulf Coast operations from New Orleans to Houston.

    The MMS is expected to release a report on Gulf production cuts on Monday.

    At least 2.4 billion cubic feet out of an average 12.3 billion cubic feet of Gulf daily natural gas output was shut as of Sunday, according to figures provided by the companies.

    Natural gas pipeline companies did not provide any specific amounts for reduced shipments from the Gulf, but said they were fulfilling contracts from natural gas stored onshore as production offshore was cut.

    "It's significant," said Gretchen Krueger with Texas Eastern pipeline.

    Natural gas futures rose by 19 percent, up $1.87 per million British thermal units, to $11.67 on Sunday night. They briefly topped out at $12.00.

    The only U.S. offshore oil port, the Louisiana Offshore Oil Port LLC, halted all offshore and onshore operations by noon CDT (1700 GMT) Sunday so its workers could evacuate.

    The LOOP halted tanker offloading on Saturday and was supplying refiners with oil stored onshore. Onshore operations were stopped Sunday to give workers time to evacuate, said spokeswoman Barb Hestermann.

    "We're all wondering 'What am I going to have to come home to?'" Hestermann said.

    The LOOP daily receives an average 1 million barrels of foreign oil from tankers.

    Seven south-east Louisiana refineries, with a combined daily refining capacity of 1.449 million barrels, were shut or shutting down on Sunday. All were to be closed by Sunday night.

    The most vulnerable refineries appear to be the three located in Plaquemines and St. Bernard Parishes east of New Orleans.

    St. Bernard Parish is home to Chalmette Refining LLC's 190,000 barrel per day (bpd) Chalmette, Louisiana, plant and Murphy Oil Corp.'s 120,000 bpd Meraux, Louisiana, refinery.

    ConocoPhillips has a 247,000 bpd refinery located in Belle Chasse in Plaquemines Parish.

    Katrina is expected to come ashore in those two parishes.

    A storm surge of 18 to 20 feet is expected in St. Bernard Parish, said Jim Connor at the parish Emergency Operations Centre. Residents there are bracing for flooding up to the rooftops of houses.

    "We're preparing for something we've never seen before," Connor said.

    Some refiners were telling workers to be prepared to return to work on Tuesday or "as soon as practical."

    Initially, refiners will survey their plants for damage from the storm before attempting a restart.

    Offshore producers follow a similar procedure.

    http://today.reuters.com/news/default.aspx
     
  2. Gunny
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    Gunny Gold Member

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    Prepping us for the price hike.
     
  3. CSM
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    CSM Senior Member

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    Yep, and then they will post record profits at the end of the year....
     
  4. Shattered
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    Interesting hike...

    $2.64 Monday night..
    $2.79 Tuesday morning (8am)
    $2.99 Tuesday evening (5pm)

    Can't wait to see what it is this morning.
     
  5. Annie
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    Annie Diamond Member

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    Ours jumped .10 overnight. GW is releasing some oil from the strategic reserves, but that can't be more than a 'show' since there is no where to refine any released. The reserves are on the gulf coast, so I don't know how they could pump it anyways.

    http://news.yahoo.com/s/ap/oil_rese...Lfv5Qas0NUE;_ylu=X3oDMTA2Z2szazkxBHNlYwN0bQ--
     
  6. Shattered
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    10 whole cents, huh? Heh. :D
     
  7. Mr. P
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    Mr. P Senior Member

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    The supply lines to the SE are not operating. They're talking rationing here already and depleting the supply (in Atlanta) we do have in 8 days. I need a horse.
     
  8. Said1
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    [​IMG]
     
  9. GotZoom
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    GotZoom Senior Member

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    Consumers can expect retail gas prices to rise to $4 a gallon in the near future, Ben Brockwell, director of pricing at the Oil Price Information Service, said Wednesday. "There's no question gas will hit $4 a gallon," he said. "The question is how high will it go and how long will it last?"

    http://www.cnn.com/2005/WEATHER/08/31/katrina.impact/index.html
     
  10. Shattered
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    Crap.. $3.25 here now..
     

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