US oil reserves at lowest since 1982 as Hurricane Isaias nears Gulf refineries
Hurricane Isaias is forecast to pass east of New Orleans, a key refining hub, while US strategic oil reserves have fallen to about 280 million barrels, the lowest level since 1982.
Refineries running flat out
US refineries are operating at maximum rates to make up for supply shortfalls caused by the war in the Middle East, CNN reported. The country's strategic crude oil reserves have fallen to their lowest level since 1982 and now stand at about 280 million barrels. CNN stressed that the system has no spare reserves that could offset any loss of refining capacity.
The storm's track
Hurricane Isaias is moving toward the Gulf of Mexico, and analysts warn it could disrupt refineries at a time when the global energy system is already under strain. According to forecasts from the night of Thursday to Friday, the storm will strike east of New Orleans, a key refining hub, which should shield the most important energy infrastructure from its strongest effects. The real impact will depend on the storm's track and strength. Analyst Robert Yawger told CNN that the hurricane could hit at the "worst moment in 25 years" for the sector.
Offshore output and refining capacity
Shell, Chevron and BP have preventively evacuated part of their staff from drilling platforms in the Gulf of Mexico and reduced production. Andy Lipow, president of Lipow Oil Associates, said refineries located on the storm's forecast path account for 14% of the processing capacity of the US refining sector. He expects at least some of those plants will have to slow the rate at which they process crude into gasoline, diesel and jet fuel.
Distillate stocks at record lows
Distillate stocks, which consist mainly of diesel, have reached their lowest level since monitoring of the data began in the early 1980s, CNN noted. Recent drawdowns of strategic reserves to ease the energy shock have left the system with little cushion for a further disruption.
