PowerSwitch

GOM still mainly shutdown from Gustav, now this. No letup!

NB bullseye shot on Havana. Spare a thought for the Cubans! The entire island is gatting hammered - nowhere to go.

skeptik wrote: NB bullseye shot on Havana. Spare a thought for the Cubans! The entire island is gatting hammered - nowhere to go.

Yeah the only bit of Cuba not being totally pummelled is the north-western region that Gustav took out.

Tess wrote:

skeptik wrote: NB bullseye shot on Havana. Spare a thought for the Cubans! The entire island is gatting hammered - nowhere to go.

Yeah the only bit of Cuba not being totally pummelled is the north-western region that Gustav took out.

Looks like almost the whole island is going to be swept by hurricane force winds...

Current storm track has a direct cat 3 strike on Galveston ... That should shut most of the enormous Houston refining complex for a few days at least - as well as closing the Houston ship channel.

Tess wrote:Current storm track has a direct cat 3 strike on Galveston ... That should shut most of the enormous Houston refining complex for a few days at least - as well as closing the Houston ship channel.

That would take out oil use (refining), but, en route would it take out any production?


Peter.

Blue Peter wrote:

Tess wrote:Current storm track has a direct cat 3 strike on Galveston ... That should shut most of the enormous Houston refining complex for a few days at least - as well as closing the Houston ship channel.

That would take out oil use (refining), but, en route would it take out any production?


Peter.

Temporarily, all of the GOM production will be shut in, and the workers evacuated. How long it takes to bring back online depends, of course, on how much damage is done. On the current track (Mon 8th, 10pm CET) Ike is going to be ploughing over a lot of offshore platforms and pipelines.

Even if no damage is done it still takes a while to get the workers back out, check all the systems are ok and then start everything up again in the correct sequence.

Weeks to months, probably.

Edit:
The track seems to have wobbled a bit to the south since this morning. Looks like Ike is going to pass just offshore from Havana rather than right over it. Good for Havana, bad for GOM, as strength will not drop off so much while IKE is over water. Hurricanes are weird. They often do these funny little jinks and turns for no apparent reason - especially when passing over a coastline. A similar little last minute jink spared New Orleans from a direct hit when Katrina ploughed in.

If you want to track how much US gulf oil production is offline, follow the daily reports on this website: http://www.mms.gov/ooc/newweb/pressrele ... tories.htm
(Click on the activity statistics updates). It's the US Minerals Management service and companies report to them their production shut-ins (both crude and natural gas) when hurricanes are threatening infrastructure.

From these reports we can see that when Gustav came in, all 1300kbd of crude production went offline. Since then, about 300kbd has returned to production leaving 1000kbd still offline. That's over 10million barrels of delayed production that will have to come out of inventory instead.

It's not really a big problem of course, there's plenty of oil in storage, and 700+ million barrels in the US strategic reserve.

good link Tess

From the operators’ reports, it is estimated that approximately 79.4 % of the oil production in the Gulf has been shut-in. As of June 2008, estimated oil production from the Gulf of Mexico was 1.3 million barrels of oil per day. It is also estimated that approximately 64.2 % of the natural gas production in the Gulf has been shut-in. As of June 2008, estimated natural gas production from the Gulf of Mexico was 7.0 billion cubic feet of gas per day.

Source

Ike seems to be drifting North again, could take on Galveston, Houston, and/or a lot oil platofrms and refineries.

OPEC cuts, massive outages in the GOM, dangerously low petrol stocks in the US, the winter season approaching, and still the price goes down. My favourite market trader over at TOD sniffs market manipulation ahead of the November election.

RalphW wrote:My favourite market trader over at TOD sniffs market manipulation ahead of the November election.

Who's that?


Peter.

Moe_Gamble on September 10, 2008 - 9:02pm

does anyone, beside me, believes that the price its going down for election time and after will explode

I do.

This got modded +9. The guy sticks to the facts and makes good market calls.

RalphW wrote:Moe_Gamble on September 10, 2008 - 9:02pm

does anyone, beside me, believes that the price its going down for election time and after will explode

I do.

This got modded +9. The guy sticks to the facts and makes good market calls.

I wondered if it was him, and I just got to his bit on the current Ike post.

To argue a bit against it, though, doesn't the price tend to fall in the fall?


Peter.

The contention seems to be that US petrol stocks have been allowed to go low. Less petrol means less demand for oil, so that the price falls. Lower petrol prices means a greater chance of a Republican presidential victory, presumably because the Republicans are the incumbents (does it work that way? each President seems to be very individual from my distant view).

This is a risky strategy if there is a disruption to petrol production in the near future. An example of which would be a large hurricane ripping through major refining areas. Oh! (y)Ike(s)!


Peter. (Taken from moe-gamble's comments somewhere on TOD which I can't now find).

Nate Hagen's alternative view is that the fall is:

70% deleveraging
25% recession fears
5% (or less) TPTB hanky-panky,


Peter.

does anyone, beside me, believes that the price its going down for election time and after will explode

A practice which has a long and ignoble history.

British Chancellors have had a habit of engineering a tax induced 'mini-boom' in advance of general elections in order to benefit the incumbent party.

I've not studied what occurs in the USA, but it would not surprise me at all if there was a degree of manipulation from both inside and outside govt. in an attempt to provide a 'feel good' factor in the months prior to a Presidential election. The "haves and the have mores" as Bush calls "his people" scratching each others backs, via subtly hinted telephone calls over the last few months. I'm sure they'd rather see 'Bomb bomb Iran' McCain in power than Tax and Spend Obama. Nothing like yet another war to ensure that even more of what remains of the public weal gets concentrated into the right hands.

Economic and financial conditions couldn't be worse though. Paulson and Bernanke have certainly got their work cut out to ensure that there's no major crack up before they duck out to a properly paid job in private finance and an offshore tax haven in January next year.