More than 90% of all oil production in the U.S. Gulf of Mexico has been shut in ahead of the latest hurricane set to rip through offshore oil country, the BSEE said on Thursday afternoon.
And the production cuts as a result are welcomed news as oil demand continues to press down on prices.
The Bureau of Safety and Environmental Enforcement said on Thursday that 272 platforms have been evacuated, or 42% of all platforms in the Gulf of Mexico. That is in addition to 70% of all rigs and 88% of all dynamically posited rigs.
In total, 91.53% of all oil production—or about 1.7 million bpd–has been shut in, along with 61.82% of all gas production.
Shell has shut in production at all of nine platforms in the U.S. Gulf of Mexico “as a precautionary measure”, adding that all drilling operations had been paused.
Murphy Oil has evacuated some workers and facilities ahead of the storm, as has Equinor, BP, Chevron, and BHP.
Several storms this season have shut in production in the Gulf, starting with Cristobal in June and most recently ending with Sally. The hurricane that shut in the most oil and gas production in the Gulf, however, was Laura, which made landfall in late August.
At its peak, Laura forced the evacuation of all 16 dynamically positioned drilling rigs, 11 of the 12 positioned drilling rigs moored to the seafloor, and nearly half of the 643 offshore production platforms operating in the Federal Offshore Gulf of Mexico. The peak shut-in of crude oil production occurred on August 25, two days before Laura’s landfall, when 84 percent of the region’s average daily crude oil production in 2019 was shut in, the EIA said earlier this month.
WTI and Brent were both trading up by nearly 4 percent on Thursday afternoon, with WTI trading up $1.24 per barrel at $41.24 and Brent trading up $1.43 at $43.42 per barrel. By Friday morning, crude prices were slightly down with WTI trading at $41.06, 0.32% down on the day, and with Brent changing hands at $43.19, some 0.35% down on the day.
By Julianne Geiger for Oilprice.com