Make no mistake, these are killer storms! I am mostly monitoring for any damage to the L.O.O.P. (Louisiana Offshore Oil Platform) of one of those terminals is damaged, all bets are off. And look at all these facilities right in the path of destruction!

Oil starts trading this evening for the electronic session and will shut down again for the Labor Day holiday…Can you say volatility!

Check back here later for my video blog on the situation and any updates….Stay safe!

From Matt Simmons (Twilight in the Desert author and former energy advisor to George W Bush): “LOOP (Louisiana Offshore Oil Platform) is the only facility in the Gulf to unload VLCC tankers which carry over 2 million barrels of crude. They can in theory be unloaded onto smaller tankers that can make it into the Gulf Coast ports but this is very lengthy timing and the spare capacity of these smaller tankers is slim.”

We get about 1.2 million b/d +/- 10% of crude imports through Loop. However, they also have upwards of 54 million barrels of storage and will be pumping to their customers for quite some time with or without new tankers, presuming the refineries are open. When/if the SPR gets going, it can release up to 4 million barrels a day.
And this note from Black Bear of Jurojinweekly.com

“My take: A lot of the oil infrastructure in Energy Alley has been reinforced since Katrina/Rita. The post-Katrina rig protection modifications will soon be tested. If the infrastructure is damaged, that could affect your prices at the pump. A note: After Katrina, people stopped driving and stayed home to watch New Orleans disaster-porn on the TV, significantly reducing gasoline demand and sending prices lower. That’s right – hurricanes can drive prices down as well as up. So I guess my “forecast” is for more volatility.”

Black Bear

Maybe, but damage to oil terminals and refineries is really the worry here…Platforms not so much. Thanks Black Bear!