Factbox: US Gulf Coast energy industry assessing impacts of Hurricane Laura

New York — The US Gulf Coast energy industry was assessing the impacts of Hurricane Laura Aug. 27 and deciding when to begin reopening after the storm swept through the area overnight.

More than 2.3 million b/d of refining capacity was taken offline in advance of Laura's landfall. Two large refineries operated by Citgo Petroleum and Phillips 66 near Lake Charles, Louisiana were most directly in the path of the hurricane.

Most refiners said they were assessing possible damages before ramping back up, and US Secretary of Energy Dan Brouillette said there was minimal damage to plants, which should return soon once power is restored.

Almost 840,000 utility customers were without power around 2 pm CDT Aug. 27 in Arkansas, Louisiana, Mississippi and Texas in the wake of Hurricane Laura.

Brouillette also noted that the critical Colonial Pipeline system was undamaged and still moving refined fuel products from Texas and Louisiana to up along the US Atlantic Coast.

The US refined products market reflected some confidence that supply would indeed return soon. NYMEX September RBOB futures, which had rallied roughly 11 cents early in the week, had given back the bulk of that increase by Aug. 27.

A surplus of refined products inventories, the result of low demand stemming from the coronavirus pandemic, helped to cushion the impact of the refinery outages.

Crude futures were also slightly weaker Aug. 27, as offshore producers were assessing platforms for damage and preparing to return.

Offshore producers have shut about 1.559 million b/d of oil as of Aug. 27, or 84.3% of offshore production, and 1.628 Bcf/d of natural gas, 60.1% of offshore production, according to the US Bureau of Safety and Environmental Enforcement.

"Given the latest shut-in numbers...peak impact on US Gulf supply has likely been reached, and supply could recover from Laura by the middle of next week, assuming platform inspections do not yield material damage," according to S&P Global Platts Analytics.

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PRICES

OIL

**NYMEX September RBOB settled at $1.2845/gal Aug. 27, down 7.61 cents on the day, and down 11.14 cents since Aug. 25.

**Spot gasoline also weakened, with USGC unleaded 87 falling 3.5 cents Aug.27 to NYMEX RBOB plus 75 points/gal.

**NYMEX September ULSD settled at $1.2107/gal, down 3.40 cents on the day, and down 4.94 cents since Aug. 25.

**NYMEX October crude settled at $43.04/b, down 35 cents on the day, as traders appeared confident offshore supply would return soon.

NATURAL GAS

**Southeast and East Texas natural gas prices bounced back Aug. 27 for gas flowing on Aug. 28 as Hurricane Laura exited the region.

**Houston Ship Channel cash prices rose 17.5 cents on the day to $2.48/MMBtu. Katy cash prices rose cents to $2.48/MMBtu.

**Prices for deliveries into the key Asian import market were more bullish amid tighter US supplies due to the shutdowns at Sabine Pass and Cameron LNG. The Platts JKM for October rose 15 cents to $4.058/MMBtu Aug. 27.

TRADE FLOWS

OIL

**The US is well-supplied with refined products, providing a cushion to the loss of refinery capacity. US Gulf Coast diesel stocks at 57.76 million barrels the week ended Aug. 21 were 47% above the five-year average, US Energy Information Administration data shows.

**USGC gasoline stocks at 90.05 million barrels were 14% above the five-year average.

NATURAL GAS

**US LNG production fell to new 18-month low of 2.1 Bcf/d as Sempra's Cameron LNG and Cheniere's Sabine Pass Liquefaction, two of the country's biggest LNG export terminals, remained shut down Aug. 27. Officials at both facilities were awaiting word from local authorities that it was safe to access the sites to determine what, if any, damage occurred and when production could resume.

**No LNG tankers were loading at either facility, and no tankers appeared to be heading into the area, Platts vessel-tracking software cFlow showed Aug. 27. Sabine Pass has a capacity of 25.6 million mt/year, while Cameron LNG has a certificated capacity of 15 million mt/year.

**Southeast natural gas demand fell nearly 500 MMcf on the day Aug. 27 to 20.49 Bcf but is expected to increase back to 21.05 Bcf on Aug.28, according to Platts Analytics.

**Similarly, Texas demand fell 100 MMcf to 11.55 Bcf on Aug.27 but is expected to increase 400 MMcf on Aug. 28 to reach nearly 12 Bcf.

INFRASTRUCTURE

OIL

The following Texas and Louisiana refiners, totaling roughly 2.34 million b/d of capacity, were assessing damage or preparing to restart following the storm:

• **Over 50% of US refining capacity is on the Gulf Coast, with PADD III refining capacity, including condensate splitters, totaling over 10 million b/d, according to Platts Analytics. Of that, 9.6 million b/d is in Texas, Louisiana and Mississippi.

  **Chevron has begun to bring back crews and restore production Aug. 27 at its operated platforms that were shut earlier in the week.

  **Other producers are likely also out in the US Gulf restoring production, but so far have not issued public comments. Most majors and large public operators announced shut-in oil and gas production ahead of the storms, including BP, Shell, Chevron, Norway's Equinor and Australia's BHP.

  **Offshore producers have shut about 1.559 million b/d of oil as of Aug. 27, or 84.3% of offshore production, and 1.628 Bcf/d of natural gas, 60.1% of offshore production, according to the US Bureau of Safety and Environmental Enforcement.

  **Magellan Midstream Partners said its East Houston terminal hub is operating normally after briefly suspending truck-loading operations late on Aug. 26. Magellan had shut down its nearby Galena Park oil and refined products terminal.