Hurricane Delta’s passage through the Gulf of Mexico squeezed the oil market, pushing up prices and forcing companies to evacuate facilities before the storm arrived, according to reports.
Energy companies worked to secure facilities and eliminate employees as early as Tuesday, when the hurricane reached Category 4 status and wind speeds reached between 130 and 156 mph.
Safety precautions pushed oil prices up more than 3% on Tuesday, further boosted by a workers’ strike in Norway and a possible government revival, Al Jazeera reported. U.S. gasoline futures rose 2% and hit their highest level since September 28.
Storm warnings and dangers also forced the shutdown of 29.2% of offshore crude oil production in the northern Gulf on Tuesday as well. That number rose to more than 80% closures on Thursday, according to Independent Commodity Intelligence Services.
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Bloomberg reported that the shutdowns pushed oil past $ 40 a barrel as a result.
“Hurricane Delta supported the latest rally” in prices, said Ole Hansen, head of commodities strategy at Saxo Bank. “Renewed stimulus hopes have generally given assets increased risk.”
The United States Bureau of Safety and Environmental Enforcement has equated the closures with a decrease of 1.49 million barrels / day and 1.33 billion cubic feet of gas since Wednesday.
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The remaining petrochemical plants and refineries in and around Louisiana continue to monitor the storm before deciding whether or not to shut down operations as a precaution. The storm weakened in Category 2, with a brief return to Category 3, before landing in Louisiana and becoming Category 1.
Shell, BP and Chevron have said they are taking further steps to stop production at all of their platforms and facilities operated in the Gulf, S&P Global reported.
“As a precaution, Shell has halted production at its nine assets and is evacuating all staff,” Shell said in an Oct. 7 statement. “We are in the process of safely suspending all drilling operations. ”
BP had only a day earlier closed and evacuated four offshore platforms before the storm. Ground facilities continue to operate, but companies continue to monitor the storm’s progress.
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A LOOP spokesperson said on October 7 that the offshore port’s marine terminal had suspended operations before the storm.