Traders rush to ship oil from Louisiana as Harvey looms
Storm threatening to close last major terminals still operating on US Gulf Coast
NEW YORK/HOUSTON, Aug 30, (RTRS): Oil traders were scrambling on Tuesday to move crude and fuel supplies through ports in Louisiana as Tropical Storm Harvey barreled toward the state, threatening to close the last major oil terminals still operating on the US Gulf Coast.
Harvey pummeled the heart of the US energy industry in Texas, dumping a record amount of rain and triggering catastrophic flooding in Houston. Harvey was the strongest storm to hit the state in more than 50 years, forcing operators to shut refineries, pipelines and ports.
Harvey was forecast to come ashore in western Louisiana near the Texas border on Wednesday. The region includes the St James trading hub, with more than 2.5 million barrels per day (bpd) of refining capacity. It is also home of the Louisiana Offshore Oil Port, the largest privately owned US crude storage terminal.
Louisiana had become the last exit and entry point into refinery row on the US Gulf Coast. Its ports import and export millions of barrels per day (bpd) of crude and fuel. Texas and Louisiana are home to 45 percent of total US refining capacity.
“Louisiana is open and being used as much as possible to discharge fuel and load exports,” a trader at a refinery said.
Other traders also said they were hurrying to take advantage of the closing window to import fuel into the US Gulf as prices skyrocket. Prices in the region have risen as supply falls due to refinery closures.
According to Eikon shipping data, the Ridgebury Julia, a tanker carrying oil products, was diverted earlier this week. It was originally going to Corpus Christi, Texas. As of Tuesday, it changed its destination to New Orleans.
Buyers for Latin America, where many countries are heavily reliant on US supplies, are trying to buy cargoes. Asian refiners are also keen to buy US cargoes and concerned about delays to those they have already bought, shipping sources said.
The window for shipping is closing as conditions deteriorate and Harvey moves east toward refineries and ports in the state.
The prices in spot markets for gasoline in the Gulf have soared TRIPOLI, Aug 30, (RTRS): Libya’s crude production has fallen by 360,000 barrels per day after armed brigades blockaded pipelines and closed three oilfields, state-run National Oil Corporation (NOC) said on Wednesday.
The shutdowns have so far cost $160 million in lost oil sales, the NOC said in a statement.
It said it would supply its Zawiya refinery by sea to keep the plant producing for domestic consumption after the Sharara, El Feel and Hamada oilfields were closed.
Libya’s oil infrastructure has been hit often by protests and fighting since Libya descended into chaos after the
above benchmark prices in New York Harbor, according to Reuters data.
US crude prices have fallen because refiners are processing less oil. That has pushed US crude prices below prices for crude elsewhere, making it cheap for international refiners if they can still get a cargo out.
US crude’s discount to London’s Brent futures grew on Tuesday, touching the contract’s widest 2011 uprising that ousted long-term leader Muammar Gaddafi. A UNbacked government struggles to impose control over rival armed factions vying for power.
Production had recently edged back up to just over one million bpd after the NOC managed to negotiate the reopening of several fields through talks with local communities and tribal leaders. Major ports were also reopened.
“This is a national tragedy — our production was recovering, not enough to balance the budget, but it was enough to give us hope the financial situation could stabilize,” NOC chief Mustafa Sanalla said. “Now we are sliding backwards.”
level of $5.90 a barrel.
A spokeswoman for LOOP declined to comment when asked about the level of interest in using the port in recent days.
In Texas, Shell was assessing the impact of Harvey, but a spokesman did not respond to a question about the status of its Sugarland terminal in St James, used for crude exports.
On Monday, the Port of Corpus Christi Authority said it had restored An armed group claiming to be part of the Petroleum Facilities Guard — a semi-official brigade protecting oilfields — shut down a pipeline to Sharara oilfield last week to demand more resources for the brigade’s home region of Zintan in western Libya.
The NOC said that on Aug 19 the Reyayna patrol unit closed the Reyayan valve on the crude oil pipeline which links Sharara and the Zawiya refinery.
Sharara — Libya’s largest oilfield and which was producing around 280,000 barrels per day — had been shut a week ago. NOC declared force majeure on loadings of Sharara crude
power to several facilities and was working to return to normal operations next week. Transfers from one ship to another near the port have also been delayed, sources said.
Vessels moving in and out of Energy Transfer Partners’ Nederland terminal in Texas have been delayed, sources said. An ETP spokeswoman did not respond to a request for comment on the terminal. from the Zawiya oil terminal. It said it would now supply by sea instead.
The NOC said the group also closed pipeline No. 18, which produces 8,000 bpd linking the Hamada field and Zawiya, on Aug 25 and a day later raided the control room of the El Feel oilfield and stopped 70,000 bpd of output there.
A force majeure is still in place on all three fields.
Hit by protests, militant violence and pipeline blockades, Libya’s crude production has at times fallen below 300,000 barrels per day, far from the 1.6 million bpd the North African state produced before the 2011 revolt against Gaddafi.
The Houston Ship Channel was shut, and the Port of Houston will remain closed on Wednesday.
The backlog in unexported refined products will be a challenge to Texas Gulf Coast refiners, according to Sandy Fielden, an analyst at Morningstar.
Damage to roads and fuel stations may delay some refinery restarts, he said, because they would quickly run out of storage of fuel produced.