More than 1.6 million barrels of oil were cut by US oil and gas companies Friday as a major storm churned toward oilfields that produce 17 percent of the nation’s oil. Hurricane Ida, which intensified into a hurricane with winds of 85 miles per hour (130 kph) on Friday, had cutbacks exceeding those during 2005’s devastating Katrina, according to the National Hurricane Center (NHC). A major hurricane could develop into ‘an extremely dangerous hurricane’ and threaten the US Gulf Coast with ‘catastrophic wind damage,’ the NHC said.
Royal Dutch Shell Plc, the top oil producer in the Gulf of Mexico, has suspended production at seven platforms offshore and two plants onshore. BP Plc halted work on four platforms. They both said they were evacuating offshore workers. Chemical giant Chevron said it is shutting down production on six platforms in the Gulf of Mexico and is evacuating all employees. Several BHP and Equinor employees have left their offshore facilities, spokespeople said. According to US offshore regulators, 59 percent of Gulf oil production and 49 percent of natural gas production were shut down. There were 90 offshore facilities evacuated and 11 drilling vessels moved out of harm’s way.
In terms of intensity, the hurricane could be comparable to hurricanes Laura and Harvey, said Joe Bastardi, chief forecaster with Weatherbell Analytics. Both hurricanes had winds exceeding 130 mph (209 kph). ‘It could go as high as a category 5 in the worst-case scenario,’ he warned. Katrina, a hurricane that ravaged Louisiana, cut supplies by up to 1.53 million barrels per day. The damage to platforms and refineries caused production outages that lasted for weeks.
Delta shut in up to 1.69 million barrels per day last year. Sources familiar with the matter said PBF Energy has scaled back production at its refinery in Chalmette, and Phillips 66 has released non-essential employees and shut down its Alliance, Louisiana, refinery. Shell is also stopping fuel production at its Norco refinery, and chemical production at its Geismar plant in Louisiana.
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Oil prices rose nearly 2 percent on Friday, marking their biggest weekly increase in over a year. Some Gulf Coast gasoline prices rose for a fourth day, with one type of fuel rising by 600 percent since Tuesday. The Gulf Coast accounts for over 45 percent of US refining capacity. Louisiana’s governor warned residents to prepare for a major storm, President Biden declared a federal emergency, and New Orleans and coastal authorities urged residents to seek higher ground. Last year, five storms made landfall in Louisiana, causing billions of dollars in damage.
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