Commodity Corner
Views on commodities and energy
Hurricane recovery for energy production slower than expected
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Back-to-back hurricanes have hobbled a huge chunk of U.S. oil and refining production in the biggest hit to the energy sector since at least 2005, and the recovery is moving along more slowly than some energy analysts had expected. Commercial gasoline inventories in the world’s biggest energy consumer have dropped to their lowest on record due to the effects of the storms and pipeline problems have triggered shortages at the pumps in parts of the East Coast and Midwest. Energy experts have said the severe supply disruptions have kept oil prices buoyed above $100 a barrel despite overarching economic gloom that is hitting the global markets.
Click the buttons on the graph below to see the impact hurricanes Gustav and Ike have had on crude oil, natural gas, and refining production since Gustav swept into the Gulf of Mexico in late August.
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Great post Frank, love the animated graph. Its clear that hurricanes have the greatest impact on refinery capacity. I wonder how that would play out given that the CHK has recently reduced production capacity. Not sure if this is a tactic to keep oil above $100, but I simply don’t understand. Or perhaps its to make offshore drilling more attractive which was lifted just today.