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U.S. Gulf crude flowing again after hurricane disruptions

U.S. gulf crude

U.S. gulf crude oil is flowing again. It is slowly coming back after the hurricane disruptions suffered in the last few weeks. According to Reuters and data from Refinitiv Eikon, 26 million barrels of offshore production are flowing again through the U.S. hubs.

As we reported previously, Hurricane Ida disrupted the U.S. Gulf Coast energy sector, particularly upstream operations. Offshore platforms endured damages from the powerful winds. The power also endured several outages. The people of Louisiana had to live through intense flooding and power blackouts.

However, as of this Friday, almost 28% of the U.S. Gulf Coast output remained offline; a substantial comeback since Ida made its landfall more than two weeks ago. Refinitiv Eikon also notes that around the 50 tankers set to load U.S. crude at Texas and Louisiana terminals, almost all of them remain on track. Only 22% are experiencing delays.

On the other hand, and to boost sales, exporters of Mars crude offered an alternative to buyers. The Mississippi platform offered to switch to lower crude grades, re-scheduling loadings, or changing ports. The strategy ended up in a price release of 50 cents per barrel, compared to the WTI benchmark. Such decrease is the lowest in two weeks, according to Reuters.

However, due to damages on the platforms, specifically in Royal Dutch Shell’s West Delta-143 platform, Mars crude may be the last one to reenter the market. The West Delta platform produces and controls the flow of three-degree crudes. As of Chevron Corp., it said it was getting ready to restart production at its Petronius platform.

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U.S. Gulf crude peaking up after Ida and Nicholas

Moreover, some of the tankers that were scheduled to load at Louisiana ports in the last three weeks have diverted to Galveston Offshore Lightering Area (GOLA) and Corpus Christi, Texas. These ports are fully working after brief halts after hurricane Nicholas.

In contrast, the Louisiana Offshore Oil Port (LOOP), has yet to receive its first vessel since Ida, according to Refinitiv data. Loops is the largest privately-owned U.S. export terminal. Its storage caverns were only 26% utilized in August, the company said.

Furthermore, Reid I’Anson, senior commodity analyst at data provider Kpler, said. “LOOP oil exports show few signs of a pickup following Hurricane Ida. In fact, the port’s August departures included a single vessel taking 2 million barrels of Mars crude, “the lowest absolute total leaving LOOP in any given month since February.” He said.

Finally, weekly U.S. crude exports in September have slipped to between 2.34 million bpd and 2.62 million bpd, according to preliminary data from the U.S. Energy Information Administration, from 3 million bpd in late August.

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