Texas May Face Another Hurricane Soon
Tropical Storm Nicholas in the Gulf of Mexico could turn into a hurricane and hit Texas in coming days.
That’s what Rystad Energy’s oil markets analyst Nishant Bhushan said in a statement sent to Rigzone on Monday, adding that the threat of more disruptions from extreme weather is a cause of concern for producers and a reason for traders to add price premiums.
“Hurricane Ida’s impact is lasting more than the market expected and as some oil production capacity remains shut this week, prices are rising on supply not being restored and therefore not reaching refineries that have restarted operations quicker than producers,” Bhushan said in the statement sent to Rigzone.
“Although BSEE’s latest update on Hurricane Ida on Sunday showed U.S. Gulf of Mexico production had recovered about 320,000 barrels per day compared to Friday’s reporting, this could soon be turned around if Nicholas turns into a hurricane,” the Rystad Energy representative added in the statement.
“Nicholas could impact loadings at the ports and also refineries and turn last week’s rising number of working rigs around again,” Bhushan went on to say.
The Rystad Energy oil analyst noted that despite Hurricane Ida being “unusually” net-bullish on supply-demand, the impact of additional hurricanes is not yet known. Bhushan added that there is a risk when the market is drawing bullish price conclusions ahead of time.
According to the National Hurricane Center (NHC), Nicholas was a tropical storm as of Tuesday, 4am CDT. In an advisory over Tropical Storm Nicholas posted at the same time, the NHC noted that heavy rainfall will impact areas from the upper coast of Texas, across Louisiana, southern Mississippi and far southern Alabama through the middle of the week. The NHC also warned that there is a danger of life threatening storm surge inundation along the coast of Texas from Sargent to Sabine Pass.
As of September 13, the Bureau of Safety and Environmental Enforcement (BSEE) estimates that approximately 43.6 percent of oil production and 51.61 percent of gas production in the Gulf of Mexico remains offline as a result of Ida. This equates to 793,522 barrels of oil per day and 1.15 billion cubic feet of gas per day, the BSEE highlights.
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