Oil operations resume, but storms on the horizon
Gustav's punch turned out to be less severe than originally feared — especially when compared to hurricanes Katrina and Rita three years ago — but it still shuttered about 15 percent of the nation's refining capacity in the region and brought nearly 100 percent of the Gulf's oil and natural gas production to a halt.
Gustav, however, was preceded by a larger disturbance — an economic storm that already was driving down demand for gasoline and, as such, the hurricane did little to move prices at the pump.
The price for a gallon of gasoline has fallen more than 10 percent from the July 17 record average of $4.114 a gallon. Gas fell again slightly overnight to $3.678 a gallon; crude declined Thursday for the sixth straight session on the New York Mercantile Exchange.
Oil companies restored a bit more production Thursday, and some refineries were cranking back up — but everyone kept an eye on three storms lurking in the Atlantic: Hanna, Ike and Josephine. Ike, in particular, appeared to be a possible threat to enter the Gulf sometime next week.
The U.S. Minerals Management Service, which oversees offshore activity, said Thursday afternoon about 5 percent of the Gulf's oil production had been restored, and natural gas output stood at about 12.5 percent.
Exxon Mobil Corp. was among the companies that said some production had resumed at platforms that were not in Gustav's path, and that it continued assessments at facilities raked by Gustav.
Most companies have said initial inspections revealed little significant damage.
On the refining end, some of the dozen or so facilities in Louisiana that shut down as Gustav approached were powering back up.
ConocoPhillips said it was restarting its Lake Charles, La., refinery, though it's expected to take 10 to 14 days to reach normal production levels. Another refinery near New Orleans was without power so it remained shut down, ConocoPhillips said.
Valero Energy Corp. Chairman Bill Klesse said Thursday the company was restarting its refinery in St. Charles, La., but he said it would be Sunday or early next week before it was processing significant amounts of oil.
Like some other refineries, the Valero restart was contingent on getting power restored and had nothing to do with storm-related damage, he said.
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