Storm Helene is moving east, with the Gulf of Mexico oil platforms likely to avoid any damage from it, the latest reports on the storm’s development suggest.
Helene is still a storm but some expect it to grow to a hurricane, and fast, according to Yahoo News. The outlet reported that the National Hurricane Center had predicted Helene would develop from a tropical storm to a Category 3 hurricane within 60 hours. This means it could strengthen into a hurricane by the end of the day today.
The storm is expected to make landfall in Florida, which has already declared a state of emergency. Even so, oil and gas operators in the Gulf are shutting in production. According to Reuters, 16% of crude oil production has been suspended along with 11% of natural gas output. This equals some 284,000 bpd in oil production and 208 million cu m of gas production.
The last hurricane that passed through the Gulf of Mexico shut-in close to 700,000 bpd in production for days, serving to prop up oil prices. Some production remained shut in a week after Francine made landfall in Louisiana.
Offshore platforms in the Gulf of Mexico produce some 14% of total U.S. crude oil production, per Energy Information Administration data. The Gulf also contributes 5% of total natural gas production.
The Gulf Coast also accounts for almost half of U.S. oil refining capacity and 51% of gas processing capacity. Francine disrupted these operations, too, with some refiners cutting processing rates ahead of the storm.
There have been scary forecasts for hurricane season this year, with one team of scientists expecting as many as 33 named storms. That apocalyptic prediction has so far failed to materialize—Helene is only the eighth named storm since the start of the season. Half of these storms have made landfall so far this season.
By Charles Kennedy for Oilprice.com