Commodity Corner

Commodities Agenda: Impact of Gustav and Ike (and a cameo from Lehman)

U.S. crude futures have just settled down 5.4 percent at $95.71 a barrel. Turmoil in the stock market plays a role but early signs Hurricane Ike spared key energy infrastructure also weighed on prices. In Texas, Chris Baltimore writes “widespread power outages were the key hindrance. Electricity is the lifeblood to Gulf coast refineries.”

Early indications are that the storm caused only minor to moderate damage to platforms and coastal refineries.

CUMULATIVE IMPACT OF GUSTAV AND IKE
*20.48 million barrels of crude oil
*102.79 billion cubic feet of natural gas
*33.06 million barrels of refining (counting only plants completely shut)

CURRENTLY SHUT/SLOWED
*99.9 pct Gulf of Mexico oil output
*93.8 pct Gulf of Mexico gas output
*16 refineries shut, 24.6 pct of US capacity
*5 refineries representing 7.7 pct of US capacity at reduced rates
*Some ports, Gulf Coast pipelines ramping back up
*At least 55 ships await entry to Houston
stock market plays a role but early signs Hurricane Ike spared key energy infrastructure also weighed on prices.