Crude oil review: Assessing the impact of hurricanes on oil and gas production and refining in the U.S. Gulf region, international oil prices continue to rise.
1. Hurricane Ida interrupted most of the oil and gas production and refining in the U.S. Gulf region,
2. The market pays attention to the production policy meeting of OPEC and its production reduction allies held on Wednesday
Hurricane Ida severely damaged the oil and gas and refining infrastructure in the Gulf region of the United States, and international oil prices continued to rise. On Monday (August 30), the New York Mercantile Exchange West Texas Light Oil October 2021 futures settlement price was US$69.21 per barrel, an increase of US$0.47/barrel or 0.7% from the previous trading day, and the trading range was US$67.67-69.64/barrel. Barrel; London Intercontinental Exchange’s October 2021 Brent crude oil futures settlement price was US$73.41 per barrel, an increase of US$0.71/barrel or 1.0% from the previous trading day, and the trading range was US$72-73.69/barrel.
Hurricane Ada made landfall in Louisiana. On August 29, Ada made landfall in southwest New Orleans as a Category 4 storm with wind speeds of 150 miles per hour and even higher gusts. Before landing, most of the crude oil and natural gas production capacity in the U.S. Gulf region had been closed. Refining and chemical plants along the Mississippi River, with approximately 1.9 million barrels of oil refining capacity per day (equivalent to 10% of the US total), have been closed or reduced operating rates. On August 30, most of the crude oil production in the U.S. Gulf of Mexico was still in a state of suspension, and many companies may need time to assess the damage caused by Hurricane Ida. On August 30, the US Gulf region still had 1.72 million barrels of crude oil production closed per day, accounting for 94.6% of the area’s daily production capacity of 1.8 million barrels. On the 29th, crude oil production fell by 95.65%. An oil refinery in New Orleans, Louisiana, is evaluating the impact of Hurricane Ida on the plant and surrounding infrastructure. As of August 30, nearly 75% of Louisiana’s oil refining capacity was offline.
However, the impact of Hurricane Ida on the oil market is still uncertain. The hurricane has led to a decline in crude oil production, but the demand for crude oil from refineries has also declined. The key lies in the impact of the hurricane and the time of infrastructure repair. Commonwealth Bank of Australia analyst Vivek Dhar said: “It’s too early to assess the market. Refined oil such as gasoline and diesel is likely to see even greater increases due to the shutdown of refineries, especially when refineries and pipelines resume normal operations. In difficult situations.”
The oil pipeline from Houston, USA to Greensboro, North Carolina, the Colonial Line 1 and Line 2 systems have been temporarily suspended on August 29, and the Colonial Line 3 and Line 4 from North Carolina to New Jersey Never ceased operations. This pipeline is an important artery for the supply of refined oil to the southern and east coasts of the United States, and its closure may put pressure on gasoline inventories in already tight regions. The Colonial Pipeline Company has conducted a damage assessment of the pipeline on August 30, and will work out a timetable for restarting thereafter.
The market is also paying attention to the production policies of OPEC and its production reduction allies. According to the news published on the OPEC website, the 19th ministerial meeting of OPEC and non-OPEC (OPEC+) will be held on September 1, 2021 through video.