LIMA — Hurricane Laura’s touchdown Thursday near the country’s hub of off-shore crude oil production has created market opportunities for the more local segments of the oil industry.
The Category 4 Hurricane Laura hit Louisiana around 1 a.m. Thursday, leaving roughly 900,000 people without power in Louisiana, Texas and Arkansas as it moved northeast up and out of the United States.
Refineries concentrated near the coasts had stopped gas and oil production as a precaution to safeguard across the storm, and they’ve been assessing the damage made by the 100-mph winds. The resumption of production could be days or weeks away depending on the damage.
Dawn Delaney, spokesperson with Husky Energy, said the hurricane hasn’t affected the supply or availability of crude oil for Lima’s Husky Refinery.
But the shutdown of Louisiana’s coast, however, has allowed some producers in regions far away from the hurricane’s impact to move it more effectively. The end result is refineries throughout the Midwest can sell more oil products to where they’re needed.
“The pipelines in place can move gas to some hub in the country. That’s definitely a plus,” Dr. Robert Chase, former chair of the Department of Petroleum Engineering and Geology at Marietta College, said. “In addition to the price going up, it allows us to sell more gas in the region.”
While availability of gas is still strong, Louisiana’s expected shutdown of refineries has pushed the price of gas up locally at the pump. While that may good for the oil industry, Chase estimates the jump in prices, however, will be short-lived.
According to GasBuddy, a gas-price tracking database, regional averages by zip code ranged from just over $2 to $2.27 per gallon as of Friday. Chase said the temporary bump should be gone sometime next week.
“The hurricane cut domestic gas production by 35%, but that’s a temporary situation. They’ll go back out and open the wells again,” Chase said.
Hurricane Laura was also set to affect natural gas markets, Chase said.
As of Friday, natural gas futures have jumped up significantly, which Chase said, should prove a real boon for natural gas producers throughout Ohio, Pennsylvania and West Virginia utilizing the Marcellus and Utica shales.
“That’s an immediate shot in the arm for the local producers,” Chase said.
Reach Josh Ellerbrock at 567-242-0398.