Oil Market Flat Amid Push to Restart Storm-Hit Energy Operations

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August 28, 2020

Flood waters surround buildings as seen from a U.S. Coast Guard overflight to survey post Hurricane Laura damage near Orange, Texas, August 27, 2020. Picture taken August 27, 2020. U.S. Coast Guard/Petty Officer 3rd Paige Hause/Handout via REUTERS

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By Erwin Seba HOUSTON, Aug 28 (Reuters) – Energy companies on Friday continued efforts to restore operations at U.S. Gulf Coast offshore platforms and refineries shut by Hurricane Laura as oil markets largely shrugged off the storm’s impact.

Some 300 offshore production facilities and half-dozen refineries halted ahead of a Category 4 storm that hit the coast of Louisiana early Thursday with winds of 150 mile per hour (240 kph). The destructive winds cut a narrow path through the area, sparing facilities not directly in its path.

However, repairs to Citgo Petroleum’s s 418,000-barrel per day Lake Charles, Louisiana, plant that was on the storm’s path could take four to six weeks, according to Mizuho Securities. The company did not immediately reply to a request for comment.

Motiva Enterprises, operator of the largest U.S. refinery, and Valero Energy Corp on Friday began restarting their Port Arthur, Texas, refineries, said people familiar with plant operations.

U.S. crude futures traded at $43.10 per barrel early Friday, up six cents, and not far from its $42.34 level a week ago. U.S. gasoline futures were up two cents, but are up less than 2% from a week ago, before the storm.

Exxon Mobil Corp said its 369,024 bpd Beaumont, Texas, refinery, about 50 miles (80 km) west of where the storm’s landfall, required “minor repairs,” a spokesman said, and the company was taking steps to restart once power and port operations were restored.

“Refiners may be reluctant to quickly return to production when the product they make is a money losing proposition,” Robert Yawger, director of energy futures at Mizuho Securities, wrote on Friday.

The ports of Beaumont, Orange and Sabine, Texas, and Cameron and Lake Charles, Louisiana, remained closed on Friday, according to the U.S. Coast Guard.

Houston, the United States’ largest energy export port, restarted operations on Thursday and had nearly halved the list of 53 vessels waiting on Thursday to reenter the port.

One-way movement and other restrictions were in place on Friday at points along the Houston Ship Channel, according to the U.S. Coast Guard.

(Reporting by Erwin Seba; writing by Gary McWilliams Editing by Marguerita Choy)

(c) Copyright Thomson Reuters 2020.

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