Tropical Storm Ida is starting to take a toll on oil and gas production in the Gulf of Mexico.
Offshore oil and gas rig operators in the Gulf on Monday reported that approximately 29.6 % of the oil production in the Gulf has been stopped, and about 27.5 % of natural gas production has been halted, according to the federal Minerals Management Service.
Ida was moving north-northwest about 185 miles off of the Mississippi River early Monday with winds reaching 70 mph. It was downgraded from a Category 1 hurricane earlier in the day.
The storm trajectory would put it east of New Orleans and the majority of oil and gas facilities in the Gulf, but storms are unpredictable. Oil fields in the Gulf of Mexico account for about 25% of U.S. crude production and 15% of natural gas production.
Production has slowed because the dangerous conditions have forced evacuation of platforms and rigs in the storm’s path. Based on data from offshore operator reports submitted Monday to the MMS, personnel have been evacuated from 126 production platforms, or 18% of the 694 manned platforms in the Gulf of Mexico.
Production platforms are the structures located offshore from which oil and natural gas are produced. These structures remain in the same location throughout a project’s duration unlike drilling rigs, which typically move from location to location.
The MMS, part of the U.S. Department of the Interior, is the federal agency that manages the nation's natural gas, oil and other mineral resources in the Gulf of Mexico.
The storm didn't dampen investor demand for crude oil. Benchmark crude for December delivery, the most widely traded contract, rose $2 on Monday to settle at $79.43 a barrel on the New York Mercantile Exchange. A barrel passed $80 by early afternoon before easing back.
Uncertainty about Ida's path and its punch supported prices, at least until midmorning when wind speeds had dropped by 20 mph. Forecasters said the storm would continue to weaken and that it would likely head east of most drilling platforms and refineries.
Weather Insight LP is expecting 700,000 barrels per day of crude oil production to be halted, and 3 billion cubic feet per day of natural gas production to be taken off line until about Wednesday.
Estimated energy production from the Gulf of Mexico as of March 2009 is 1.3 million barrels of oil per day and 7 billion cubic feet of gas per day, according to the MMS
Meanwhile, shares of Anadarko Petroleum Corp (APC), Exxon Mobil (XOM), and Valero Energy Corp (VLO), all of which have operations in the Gulf of Mexico, rose Monday with the broader stock market.
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