Stock

Market Additional: Practically 95% of Gulf Coast oil and gasoline manufacturing offline as Hurricane Ida hits Louisiana

Natural gas futures were on the rise, climbing to three-year highs, and crude oil prices were mixed up in electronic trading late Sunday when Hurricane Ida, which was downgraded to a Category 3 storm, delivered sustained winds of 150 miles per hour to Louisiana and turned off the power in New Orleans.

The devastating hurricane that hit Louisiana the hardest in 165 years left nearly 95% of all US oil and gas production in the Gulf Coast region offline, according to S&P Global Platts.

Natural gas futures, meanwhile, soared to their highest prices since 2018 with the most actively traded October contract
NGV21,
+1.34%
at Globex up 1.5%, at around $ 4.45 per million UK thermal units. The September natural gas deal, which expired at the end of the session on Friday, closed at $ 4.37, according to Dow Jones Market Data.

Gulf Coast crude oil production could also have some impact from the storm. The Bureau of Safety and Environmental Enforcement reported Sunday that 95.65% of the Gulf Coast's crude oil production, or 1.741 million barrels per day, has been shut down, as well as 93.75% of the region's natural gas production.

West Texas Intermediate Crude Oil Futures
CL.1,
-0.36%

CL00,
-0.36%,
the US benchmark, relatively stable at $ 68.73 a barrel compared to a comparison for the most active October contract
CLV21,
-0.36%
on Friday at $ 68.74 a barrel. Friday's action for WTI capped a 10% surge in crude oil values ​​as bargain hunters seemed eager to jump on futures the week before during a turbulent time for power plants driven by uncertainties about the spread of the highly transferable Delta variant of COVID. was marked, were severely affected -19.

The Federal Emergency Management Agency [FEMA] said in a tweet that damaging winds will spread inland tonight, with heavy rains to follow across the central Gulf coast through Monday.

Hurricane Ida hit land in Louisiana as a powerful Category 4 before being downgraded, according to the National Hurricane Center. Still, it remains a mighty storm.

"Many assets have been hardened against hurricanes, but operational disruptions are still very likely due to flooding, power outages and relocations," said analysts at Platts Analytics.

Even before Ida hit land on Sunday, energy companies had removed their crews from platforms in the Gulf of Mexico. The BSEE reported Friday that personnel from a total of 89 production platforms – nearly 16% of the 560 manned platforms in the Gulf of Mexico – had been evacuated.

Energy production from the Gulf of Mexico is significant with offshore drilling accounting for 17% of US crude oil production and 5% of dry natural gas production, and more than 45% of total US refining capacity along the Gulf Coast, according to data from the US Energy Information Administration.

Related Articles