A really lively Atlantic hurricane season to date this 12 months has not despatched storms throughout U.S. oil and pure fuel fields within the northern Gulf of Mexico, sparing power corporations billions of {dollars} of losses and shoppers increased gasoline prices.
The 2023 Atlantic hurricane season has been one other in a string with above common exercise producing three main hurricanes with winds above 111 mph (179 kph) out of six hurricanes amongst 20 named tropical storms.
To date this 12 months, just one storm, Tropical Storm Harold, on Aug. 23 disrupted operations on the three refineries in Corpus Christi, Texas, only for a day attributable to energy outages.
That was the largest affect to the Gulf Coast oil trade this 12 months. Gulf of Mexico offshore operations account for 15% of U.S. crude oil manufacturing and 5% of the nation’s pure fuel manufacturing, whereas about half the nation’s refining capability and pure fuel processing plant capability is situated alongside the Gulf coast.
“We obtained actually, actually fortunate this 12 months,” mentioned Colin White, advisor with Rystad Power in Houston. “However there’s nonetheless an inherent danger that producers must take into consideration.”
The hurricane season formally begins on June 1 and ends on Nov. 30.
“I wouldn’t wish to say the hurricane season is over, however it’s waning,” mentioned Jim Foerster, chief meteorologist for DTN. “This season has been a powerhouse.”
Between 2019 and 2021 storms within the Gulf like Hurricane Ida shut an annual common of 24 million barrels of oil manufacturing, mentioned Rystad’s White.
At an assumed value of $70 per barrel of oil, that equals a mean misplaced income per 12 months of about $1.7 billion, White mentioned.
To date, no offshore manufacturing has been hit.
In the meantime, final 12 months’s hurricane season was the primary season since 2014 that left most offshore manufacturing unaffected, mentioned Troy Vincent, senior oil market analyst for DTN.
Lower than 200,000 barrels per day (bpd) of manufacturing was shut, Vincent mentioned.
Refiners’ view of low-activity hurricane seasons sparing them of crude provide disruption value, nevertheless, might change, mentioned Pet Jelinek, Ernst & Younger Americas oil and fuel chief.
“As we’ve seen in recent times, tropical storms within the Gulf of Mexico can have vital affect on power operations, disrupting power manufacturing, provide chains and pricing,” Jelinek mentioned.
“Nonetheless, the power system is altering,” he added. “Lowered world manufacturing of oil and fuel has made feedstocks costlier. The advantages of a milder hurricane season might not be the boon refiners and shoppers had as soon as seen.”
(Reuters – Reporting by Erwin Seba; Modifying by Marguerita Choy)
