Oil price starts to ease, but until when?
by Karen Remo-Listana
Posted: 05 September 2005
 Send this article
 Print this article
Oil prices have started to ease as petroleum-supply outlook continuous to improve in the wake of Hurricane Katrina.
Some fuel pipelines on the U.S. Gulf Coast began to restart operations shut, though the product remains in short supply after Hurricane Katrina shut down nine Gulf Coast refineries, disrupted gasoline pipelines to the Midwest and East and stopped 90 percent of the oil production in the Gulf of Mexico. The Gulf supplies around 30 per cent of US oil and 25 per cent of its gas.
ExxonMobil's second largest U.S. refinery, located in Baton Rouge,  Louisiana, will be increasing the production of gasoline and other fuel products over the next several days and will promptly ramp-up production rates further as crude supply from the Louisiana Offshore Oil Port .
U.S. and European governments agreed to release 2 million barrels a day of oil and refined products from their reserves while Japan said it was considering releasing some of its stockpiles to meet shortages in the US .
Further relieved some of price-hike pressure is the announcement of the International Energy Agency, a Paris-based oil market watchdog under the Organization for Economic Cooperation and Development of the International Energy Agency that it will put more than 60 million barrels of oil equivalent on the market over the next month, with the U.S. government portion amounting to at least 30 million barrels of crude oil from its strategic reserve.
Oil price has slightly eased since last Friday but the long-term standing is still held under qualms. U.S. gasoline production is down by about 40 million gallons a day, or 10 percent of consumption, and it could be weeks before the region's refining capacity is back to normal, analysts said. Locating workers and getting them back on the job will also take time.
Katrina damaged a total of 12 rigs, including at least 5 that are likely to be scrapped. Discounting the 3 semisubs that only suffered loss of ballast and listing, Katrina still damaged 9 offshore rigs. Additionally, damage to at least 30 offshore platforms has been confirmed, with 18 platforms a total loss. And that number may increase, as a recent MMS report indicated a total of 58 damaged platforms and rigs in the Gulf.
For which another major uncertainty has set in: How much damage has been done to the underwater pipelines connecting the offshore platforms to shore?
It will be at least several more days before those damages can be fully assessed.
Posted by Editor Pipeline Magazine
Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Reflex Publishing ME FZ LLC.
Send press release to info@pipelinedubai.com |
