Crude plunges as most U.S. Gulf oil output taken offline ahead of storm
Seeking Alpha
Published Oct 06, 2017 06:52PM ET
Crude plunges as most U.S. Gulf oil output taken offline ahead of storm
- U.S. crude oil plunged 3% today to settle at $49.29/bbl, capping a 4.6% weekly drop for the U.S. benchmark, as traders focused on the implications of Tropical Storm Nate and potential disruptions to crude production and refining capacity in the U.S. Gulf of Mexico.
- The BSEE estimates 1.2M bbl/day of crude oil production has been shut-in by operators ahead of the storm; that's 71% of U.S. Gulf oil output taken offline vs. just 25% at the peak during Hurricane Harvey.
- An estimated 53% of U.S. Gulf natural gas production, or 1.7B cf/day, also has been shut.
- The U.S. Gulf is home to ~17% of the country’s crude oil production and 5% of dry natural gas output, and more than 45% of U.S. oil refining capacity is along the Gulf Coast.
- The storm, which is expected to make landfall near Louisiana late Saturday as a hurricane, likely will lead to reduced U.S. exports of crude oil and higher refining margins given low stockpiles of gasoline and other refined products, Goldman Sachs (NYSE:GS) says.
- ETFs: USO, UNG, OIL, UGAZ, UWT, UCO, DGAZ, DWT, SCO, BNO, BOIL, DBO, GAZ, UGA, DTO, USL, KOLD, UNL, DNO, OLO, SZO, DCNG, OLEM, OILK, WTIU, OILX, WTID, USOI, GAZB
- Now read: Natural Gas Storage Forecast For Next Week
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