Hurricane Ida Expected to Raise Oil Prices

Hurricane Ida Expected to Raise Oil Prices

The coming Hurricane Ida, upgraded to a Category 4 storm on Friday, will expect to hit Louisiana coasts on Sunday. The storm is expected to be “extremely dangerous” according to the US National Hurricane Center and is expected to affect more than 95% of oil production facilities in the Gulf.  

In response, the Bureau of Safety and Environmental Enforcement (BSEE) reports that the personnel of 279 out of 560 manned production platforms have been evacuated out of the Gulf of Mexico. All of the 11 non-dynamically positioned oiling rigs in the area have had their crew evacuated while 11 out of 15 dynamically positioned rigs have been moved out of Hurricane Ida’s projected path. 

PBF, Phillips, Shell, Marathon, and Valero refineries are among the ones that are shut down. Exxon Mobil, Placid, and Katz Springs in the Baton Rouge area will operate at reduced capacity. 

The BSEE estimates 91%of oil and 85% of gas production has been shut down. After the storm, undamaged facilities will resume operations while others will need repairs and checks before production can continue. Gasoline futures climbed 2.7% from $2.27 to $2.33 on Sunday evening. US oil prices climbed 0.6% from $68.74 per barrel to $69.30 per barrel on Sunday evening. In the short term, US oil prices are expected to rise even more based on past data from Hurricane Katrina, which saw inflated oil prices for over 2 months.

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