(Agence Ecofin) – Ida, which was considered a dangerous Category 4 hurricane, lost strength after making landfall on August 29 in Louisiana. More than a million people were without power after winds blowing at 170 km / h hit the southern coast of the United States.
Hurricane Ida forced producers in the Gulf of Mexico region to shut down production capacities equivalent to 1.74 million barrels of oil per day. This was reported Sunday by the Office of Safety and Enforcement of Environmental Rules (BSSE), a branch of the State Department of the United States.
The Gulf of Mexico accounts for 17% of US crude oil production and 5% of dry natural gas production. Over 45% of total US refining capacity is also found along the Gulf of Mexico coast. At the end of last week, producers evacuated their workers on the news of the approach of the hurricane. Thus 288 platforms were evacuated, or 51% of all installations in the oil region.
It should be noted that the majority of the region’s oil export terminals have also been closed, as well as the refineries. This should affect prices in the next few days and possibly weeks if we are to believe the usual price reaction to the level of oil and gas inventories released every Wednesday by the US Energy Information Administration.
Photos: Hurricane Ida damage https://t.co/5v6bYIrLQs
— WRBL News 3 (@wrblnews3) August 30, 2021
So far, this information has not had the slightest impact on the markets. Futures contracts on WTI, the US benchmark, remained relatively stable at $ 68.73 per barrel. This, compared to a settlement for the October contract, at $ 68.74 per barrel on Friday. In contrast, natural gas futures gained 1.5% on Globex, to around $ 4.45 per million British thermal units. September’s natural gas contract, which expired at the end of Friday’s session, stood at $ 4.37, according to Dow Jones Market Data.
After Ida’s passage, work will be necessary to fully relaunch the region’s oil activities.
Olivier de Souza