Hurricane Ike shuts oil fields, disrupts refineries and ups oil prices

11-Sep-08

Further strengthening of Hurricane Ike as it stormed into the Gulf of Mexico has led to closed down of oil fields and hindrances in the refinery production. The biggest US oil-import terminal, Louisiana Offshore Oil Port which handles 13% of imports, said it shut down its marine operations owing to Hurricane Ike. The storm may come ashore near Corpus Christi, Texas, closing 586,000 bpd of refinery capacity (3.7% of total capacity in US). Further, LyondellBasell Industries has started shutting down its 293,300 bpd Houston refinery ahead of Hurricane Ike, which is expected to completely go offline by Frdiay. In addition to the refinery, Lyondell was shutting 13 other chemical and polymer plants between Lake Charles, La. and Corpus Christi, Texas. ConocoPhillips (COP) is also shuttering its 247,000 bpd refinery in Sweeny, Texas. BP Plc, Europe's second-largest oil company by market value, is closing down its gasoline and diesel fuel making units at its plant Texas City. As a result, crude oil for October delivery upped to reach US$103.95/barrel on New York Mercantile Exchange. Crude has slid down roughly 30% from a record US$147.27/barrel on July 11 as high prices and slowing global economic growth reduced demand for fuels.