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Oil markets flat as restarts begin at storm-hit energy operations

Credit: REUTERS/Todd Korol

Energy companies on Friday continued efforts to restore operations at U.S. Gulf Coast offshore platforms and refineries shut by Hurricane Laura as oil markets largely shrugged off the storm's impact.

By Erwin Seba

HOUSTON, Aug 28 (Reuters) - Energy companies on Friday continued efforts to restore operations at U.S. Gulf Coast offshore platforms and refineries shut by Hurricane Laura as oil markets largely shrugged off the storm's impact.

Some 300 offshore production facilities and half-dozen refineries halted ahead of a Category 4 storm that hit the coast of Louisiana early Thursday with winds of 150 mile per hour (240 kph). The destructive winds cut a narrow path through the area, sparing facilities not directly in its path.

However, Citgo Petroleum's PDVSAC.ULs 418,000-barrel per day Lake Charles, Louisiana, plant was on the storm's path, and repairs could take four to six weeks, according to Mizuho Securities. The company did not reply to requests for comment.

Motiva Enterprises [RIC:RIC:MOTIV.UL], operator of the largest U.S. refinery, and Valero Energy Corp VLO.N on Friday began restarting their Port Arthur, Texas, refineries.

U.S. crude futures CLc1 traded at $43.08 per barrel at midday, up four cents, up slightly from $42.34 a week ago. U.S. gasoline futures RBc1 were up 2 cents, less than 2% higher than they were a week ago.

About 84%, or 1.56 million barrels per day, of U.S. Gulf of Mexico crude output and 60% of natural gas offshore production were shut on Thursday, the U.S. Department of Interior reported.

Exxon Mobil Corp XOM.N said its 369,024 bpd Beaumont, Texas, refinery, about 50 miles (80 km) west of the storm's landfall, required "minor repairs," a spokesman said. The company was taking steps to restart once power and port operations were restored.

Cheniere Energy Inc's LNG.A and Cameron LNG's Cameron liquefied natural gas plants in Louisiana took almost no pipeline gas early on Friday, according to preliminary data from Refinitiv.

"Refiners may be reluctant to quickly return to production when the product they make is a money losing proposition," Robert Yawger, director of energy futures at Mizuho Securities, wrote on Friday.

The ports of Beaumont, Orange and Sabine, Texas, and Cameron and Lake Charles, Louisiana, remained closed on Friday, according to the U.S. Coast Guard.

Houston, the United States' largest energy export port, restarted operations on Thursday and had nearly halved the list of 53 vessels waiting on Thursday to reenter the port.

One-way movement and other restrictions were in place on Friday at points along the Houston Ship Channel, according to the U.S. Coast Guard.

(Reporting by Erwin Seba; writing by Gary McWilliams Editing by Marguerita Choy and David Gregorio)

((Erwin.Seba@thomsonreuters.com; +1 713-210-8513;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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