Oil companies recovering from Katrina

The U.S. energy industry's desperate push to recover from Hurricane Katrina began to pay dividends on Tuesday, as nearly half of the refineries fully or partially closed by the storm returned to service. All told, 20 refineries completely or partially shut down at one point, but recent signs of progress are taking some of the steam out of oil prices. U.S. crude oil futures settled down $1.61 at $65.96 a barrel on Tuesday, and gasoline slumped 12.87 cents, or 5.9 percent, to settle at $2.055 a gallon.

One key to recovery efforts has been the return of closed crude and petroleum product pipelines, which previously created supply bottlenecks. Two of the most important, the Colonial and the Plantation, are now back at 100 percent capacity.

But business is still far from usual. Eleven refineries are still fully or partially closed down. Problems also remain in the oil and natural gas production side of the business, with a number of rigs lost or badly damaged when Katrina tore through the Gulf of Mexico.

Government figures showed some improvement in the region's output, but 58 percent of its oil production and 41 percent of its gas production remain shut down. To help with the supply crunch, the International Energy Agency is releasing 2 million bpd of oil over the next 30 days, the first time the IEA has tapped member stocks since 1991. The United States is also tapping into its emergency oil stocks.

(2005-09-07 16:57:01 SGT) [Energy] Permalink

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