Posted on 09/08/2021 11:23:10 AM PDT by blam
Hurricane Ida’s disruption to the U.S. offshore energy production in the Gulf of Mexico is the worst in 16 years. It has already stressed domestic and global supply chains, further testing the Federal Reserve’s “transitory” inflation narrative.
Gulf Coast hurricanes usually cause minor disruptions in offshore oil and gas production, but this time around, output from the region has been significantly reduced due to Ida’s 150 mph winds that damaged platforms and onshore support facilities.
What this will mean is a long recovery for offshore energy production to return. Reuters notes 79% of the region’s offshore oil production remains offline.
Since the first oil platforms were evacuated ahead of Ida, there’s been a loss of 17.5 million barrels of oil. Some energy analysts are expecting U.S. production could drop by 30 million barrels this year due to the sluggish return.
“After Katrina, which made landfall 16 years ago on the same day as Ida did this year, it was well into the following year before oil production resumed its normal level,” Commerzbank analyst Carsten Fritsch told clients. “That said, Katrina was followed shortly after by another devastating hurricane, namely Rita.”
There is currently a disturbance in the Gulf of Mexico that has a 50% chance of developing over the next two days.
The outage has left a noticeable imprint on NYMEX West Texas Intermediate futures hovering around the $70 handle, up more than 11% since weather models first forecasted Ida would make landfall around the Louisiana region.
There’s no clear timeline when full production will return. “There could be volumes that are offline for a considerable amount of time,” said Facts Global Energy (FGE) consultant Krista Kuhl. “It’s just too early to tell.”
The Gulf of Mexico commands about 16% of total U.S. crude production, with 1.8 million barrels of oil per day. The numbers for total US crude production are expected to drop sharply in future energy reports.
Restoring output will take time as offshore oil and gas rigs and transfer facilities need critical repair after the storm damage.
On land, the petrochemical sector has experienced disruptions due to plant shutdowns. We noted Tuesday, a top nitrogen fertilizer plant in Louisiana declared “force majeure.” Also, the import/export of critical raw materials has been affected, if that is by rail, trucking, or be sea.
Ida is tightening the global supply of some commodities and has created a logistical nightmare for major ports in the Gulf that could pressure some commodity prices higher and hurt consumers even more.
Meanwhile, the Federal Reserve continues to reassure everyone that inflation is “transitory.”
World’s Largest Nitrogen Plant Declares “Force Majeure,” Sends Fertilizer Prices Sky High
Disturbance presently in the gulf
Biden’s fault!
He will just empty the SPR and all will be well </sarc>
Then he can go back to sleep and dream about pawing little girls. 
Oughta be good for another $1.00 per gallon.
News has been quiet but the eye went near or over a lot of refineries. I have to think the east coast is going to be affected by shortages much like the recent ransomware attack.
Wishing I had an EV about now.
Well there could be widespread power outages also.
I purchased a couple of eBikes, and I can charge them from
my Ecoflow Delta power cells.
I charge the Ecoflow Delta units up from solar.
Would like to have a small EV, one that I could charge up
from my own system.
My VW diesel gets 50 mpg with the AC on. I’m not worried at all. And my motorcycle gets 70+.
The GOM blob 91L is up to 80% chance of development.
TD 13 coming up in a few minutes...
Sure could use, say, another pipeline from Alberta Canada down to the southern refineries.
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