Thursday, Sept. 16, 2004 | 10:40 a.m.
New York crude oil futures fell for a second session today as crews return to production platforms in the Gulf of Mexico off Louisiana after Hurricane Ivan moved east of the state.
Prices have declined $1.29, or 2.9 percent, in two days. Platforms, refineries and ports are opening today. More than three-quarters of U.S. oil output from the Gulf of Mexico, or 6.5 percent of the nation's daily consumption, was cut because of platform evacuations in advance of the storm.
"We'll be keeping an eye on how much damage was caused by the storm but at the moment it doesn't seem like there was anything major," said Justin Fohsz, a broker with Starsupply Petroleum Inc. in Englewood, N.J. "It looks like we got off easily and that's why the market lost its juice."
Crude oil for October delivery was down 48 cents at $43.10 a barrel at on the New York Mercantile Exchange. Prices, which were down 12 percent from the record of $49.40 a barrel reached on Aug. 20, are 57 percent higher than a year ago.
Ivan, which spawned tornadoes blamed for at least seven deaths in western Florida, prompted the evacuation of as many as 13,000 offshore oil workers. With the storm moving north- northeast, the worst wind and rain missed refineries in Louisiana, which has the second-biggest refining capacity in the U.S. and is the nation's fifth-biggest oil producer.
Port Fourchon, La., a staging area for workers who staff offshore oil and gas platforms in the Gulf of Mexico, is opening after Hurricane Ivan left facilities undamaged. The port, which handles 15 percent to 18 percent of U.S. oil and gas supplies, often closes as storms approach because it is connected to the rest of the state by one low-lying road.
"Water has just receded and the highway to the port was opened at 9 a.m." local time, Port Director Ted Falgout said. "The port facilities are fine and weren't covered by water."
Motiva Enterprises LLC, a joint venture between Royal Dutch/Shell Group and Saudi Refining Inc., said it will resume operations today at two Louisiana oil refineries after shutting for the hurricane. The two refineries combined can process 465,000 barrels of crude oil a day.
The Organization of Petroleum Exporting Countries on Wednesday raised its output target by 1 million barrels to 27 million a day on Nov. 1, less than members are now producing. The quota is the highest on record for the 10 members that have limits, all except Iraq, as the group seeks to meet surging global demand.
OPEC's member countries are Saudi Arabia, Iran, Iraq, Kuwait, the United Arab Emirates, Qatar, Algeria, Nigeria, Libya, Venezuela and Indonesia.
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