Energy Futures Lower After Reversing Gains Seen Yesterday
Energy futures are lower so far this morning after reversing some gains seen during yesterday’s abbreviated trading session. Prompt month gasoline, diesel, and crude oil futures are all down nearly 1.5% to start the day. A decision to cut October prices for oil sales to Asia by Saudi Arabia is taking credit for the selloff today as some interpret the move as the Kingdom’s anticipation for weak short-term demand.
Repairs are underway and production is coming back online in the areas hit by Hurricane Ida last week. It seems that the plants in the Baton Rouge area have all resumed (or in the process of resuming) operations while five refineries in the New Orleans area are still waiting for the restoration of power and/or repair damage to start cranking back up.
In addition of refinery shutdowns, Baker Hughes reported a total of 11 active oil platform closures across the nation last week. The 14 rigs closed in Louisiana ahead of Hurricane Ida were barely offset by the spare opening of production sites in Alaska, New Mexico, and Oklahoma. It would not be a surprise to see these rigs come back online as repairs are completed.
It looks like the NE has dodged a bullet this week: Hurricane Larry’s projected path has shifted east over the weekend. As it currently stands only the Canadian Province of Newfoundland remains in the storm’s path. The northern Atlantic seaboard is breathing a sigh of relief this morning as another storm hitting in such quick succession could have made an already dismal situation even worse.