Storm season seen curbing some US oil, gas

OREANDA-NEWS. June 11, 2015. The 2015 Atlantic hurricane season could shutter about 53,000 b/d of crude oil and about 87mn cf/d (2mn m?/d) of output from the US Gulf of Mexico, the US Energy Information Administration (EIA) said today.

The projected shut-ins represent about 2.8pc of estimated US Gulf gas output and 3.5pc of projected crude production from that energy-rich region during the six-month-long hurricane season, according to the EIA'sShort-Term Energy Outlook.

The report factors in government forecasts for a less active Atlantic hurricane season this year.

Storms have had less influence over US energy markets in recent years because so much domestic production now comes from onshore shale fields. But storms can still damage infrastructure, creating spikes in the prices of refined products. In addition, storms can lead to power losses, cutting into demand for generating fuels.

Last year, 5pc of US natural gas came from the Gulf of Mexico, down from 26pc in 1997. US crude output from the Gulf fell in 2014 to 16pc of domestic production from 27pc in 2003, the EIA said. The agency said it no longer plans to publish a separate report on expected Gulf shut-ins because of the declining risk storms pose to domestic energy supply.

The EIA analysis said there is a 14pc chance that Gulf production will be unaffected during the season, which began on 1 June. No production was shut during the 2014 season. That year, the Atlantic basin has just two tropical storms, six hurricanes, which includes two major hurricanes with winds of 111 mph (179km) or greater.

Federal forecasters are predicting this year's season will bring six to 11 named storms, three to six of which will become hurricanes and zero to two will be major storms, according to the US National Oceanic and Atmospheric Association.

That compares with median values during the 1981-2010 hurricane seasons of a dozen named storms, 6.5 hurricanes and two major hurricanes, according to forecasters at Colorado State University.