U.S. energy market calms down after Hurricane Ida

[ad_1]

Entergy company update

Hurricane Ida hit the heart of the US energy industry, but the fuel market’s response on Monday was muted as the company began investigating the extent of the storm’s damage.

After Ida landed on the coast of Louisiana on Sunday, strong winds and flooding caused the water level to reach 9 feet. The Gulf of Mexico is home to dense oil wells, refineries, petrochemical facilities, pipelines, and natural gas processing plants.

Energy companies did not begin assessing the damage to their facilities until dawn on Monday.Louisiana still has more than 1 million customers no power, According to PowerOutage.US.

As of Sunday afternoon, offshore oil and gas producers, including Shell and BP, had evacuated their platforms in the Gulf of Mexico most of the time before the storm, shutting down 1.74 million barrels of oil a day, accounting for about 15% of US production. Nearly 94% of natural gas production in the Gulf of Mexico has fallen.

According to data from the Department of Energy, at least nine refineries in Louisiana reduced or closed their fuel production before the storm, accounting for 13% of the total U.S. production capacity.

Analysts said that oil production may recover faster than refineries, and fuel prices may be pushed up in the next few days.

An analyst at investment bank Cowen said: “The time for offshore oil production to recover from a hurricane is often in days, while the restart of a refinery can be in weeks or even months.” The bank added that this model shows the United States. The profit margin of the oil refining industry is in a relatively high period.

Analysts said that the extent and duration of power outages will be the key to the speed of energy infrastructure recovery. Entergy, one of the major power companies in Louisiana, said that it may take several weeks for service to return to normal.

US oil prices rose 0.6% to US$69.12 per barrel at midday in New York, higher than in recent weeks. Wholesale gasoline futures for September delivery, traded in New York, rose 2% to $2.32 per gallon. GasBuddy, a retail fuel price tracking service company, said that in the coming weeks, motorists expect gas prices at gas stations to rise by 5 cents to 15 cents per gallon.

The price of natural gas delivered in October from the Henry Center in Louisiana fell 2.8% to $4.267 per million British thermal units.

After many petrochemical facilities in the region (including factories operated by ExxonMobil and Dow Chemical Company) were forced to close, the storm could once again hit global plastic supplies. Louisiana is an important hub for US petrochemical production.

The price of plastic used in products ranging from takeaway food containers to PVC pipes may rise from record highs.Supply is already tight Deep freeze In Texas last winter, demand surged during the coronavirus pandemic.

Climate capital

Where climate change meets business, markets, and politics. Explore the UK’s “Financial Times” report here.

Are you curious about the environmental sustainability commitment of the Financial Times? Learn more about our science-based goals here

[ad_2]

Source link