According to the federal Minerals Management Service, Hurricane Ivan shut down output of about 4 million barrels of crude from Sept. 13 until Sept. 16 – resulting in eight refinery shut downs, which is about 13 percent of U.S. refining capacity.
By Sept. 16, only half of those refineries were restarting and consequently, fuel prices rose as another storm threatens the area, which could delay imports from entering the Gulf of Mexico.
By Sept. 16, U.S. light crude prices rose 30 cents to $43.88 a barrel – but Ivan’s impact on fuel prices could have been disastrous.
Ivan’s easterly turn avoided a direct hit that would have crippled refinery operations along the Gulf Coast’s “refinery row.” The storm narrowly missed major refineries, tank farms and other Louisiana and Texas facilities. It also bypassed the biggest grouping of offshore oil and gas production platforms in the Gulf of Mexico.
The Gulf Coast accounts for nearly half of the U.S. daily refining capacity of 16 million barrels. Meanwhile, U.S. refiners are running near capacity to build stocks of winter heating fuels.
Jeff Dietert, refining industry analyst at Simmons & Co., predicted higher futures prices for oil and gasoline — and for consumers — after the government reports data on fuel stockpiles next week. That report will show how much oil companies and their customers have drawn from crude and gasoline inventories to make up for deliveries delayed by Ivan and tropical storm Jeanne, Dietert told USA Today.
– By Dick Larsen, senior editor