Page 10 - NorthAmOil Week 37

NorthAmOil COMMENTARY NorthAmOil

Given the extent of the damage in Lake the loading of tankers on September 13, with
Charles, refiners will be relieved to have been the onshore Port of New Orleans shutting the
largely out of Hurricane Sally’s way. They following day. Both ports have since resumed
include Royal Dutch Shell, despite the com- operations.
pany’s presence in Mobile, Alabama. Shell was
reported to have cut production to minimum What next?
levels at refineries in both Mobile and Norco, The outages helped to push up crude prices,
Louisiana. The super-major carried out an which had been declining again recently amid
inspection of the Mobile plant following Sal- strengthening supply and weak demand. Indeed,
ly’s landfall on September 16 and did not find the US and Canada are among the countries
serious damage. whose recovering oil production has been con-
The same day, Reuters quoted a Chevron tributing to recent price weakness. But as of Sep-
spokesman as saying that the company’s 356,400 tember 16, West Texas Intermediate (WTI) had
bpd Pascagoula refinery in Mississippi – around risen back above $40 per barrel, also pushed up
50 miles (80 km) west of where the storm made by a drawdown in crude and gasoline inventories
landfall – had run through the night. that had started prior to this week’s disruption in
the Gulf region.
Offshore outages US Energy Information Administration (EIA)
The US Bureau of Safety and Environmental data showed that in the week up to September
Enforcement (BSEE) reported on September 14 11, the country’s crude inventories fell by 4.4mn
that personnel had been evacuated from a total barrels compared with the previous week. Ana- By September
of 147 production platforms, or 22.86% of the lysts polled by Reuters had anticipated a 1.3mn
643 manned platforms in the Gulf. Three rigs – barrel increase. 16, after
or 30% of the 10 non-dynamically positioned US gasoline stocks, meanwhile, fell by 400,000 Hurricane Sally
rigs – had also been evacuated, while two had barrels compared with the previous week, which
moved off location and out of the storm’s path. was more than double the draw forecast. made landfall,
By September 16, after Hurricane Sally made While the outages caused by Hurricane Sally
landfall, personnel started returning to some are not expected to be long-lasting, they have personnel started
of the evacuated platforms. That day, the BSEE helped give the US oil industry some breathing
reported that only 119 platforms – or 18.51% space – at least as far as prices go – at a time of returning to some
of all manned platforms in the Gulf – remained mounting jitters over demand weakness. of the evacuated
evacuated. However, shut-in production vol- This has been a particularly busy Atlantic hur-
umes were reported to have risen from earlier ricane season. Following the formation of Trop- platforms.
in the week. ical Storm Teddy and Tropical Storm Vicky this
The BSEE estimated that as of September week, there have now been 20 named storms,
16, around 27.48% of Gulf oil production and and only one more name – Wilfred – is left on
roughly 29.70% of the region’s gas output was this year’s list.
still shut in as of that morning. This equates to The letters of the Greek alphabet are set to be
508,366 bpd of oil and 805mn cubic feet (22.8 used to name any further storms that may form
mcm) per day of gas that has been taken offline. over the remainder of this year. But Gulf produc-
The Louisiana Offshore Oil Port (LOOP), the ers and coastal refiners will be hoping that this
US’ sole offshore export terminal, suspended will not be necessary.™

P10 www. NEWSBASE .com Week 37 17•September•2020