As of Tuesday, September 13, 4:00 pm

According to the Minerals Management Service (MMS), as of 11:30 September 12, Gulf of Mexico oil production was reduced by 846,720 barrels per day as a result of Hurricane Katrina, equivalent to 56.45 percent of daily Gulf of Mexico oil production (which had been1.5 million barrels per day). The MMS also reported that 3.720 billion cubic feet per day of natural gas production was shut in, equivalent to 37.20 percent of daily Gulf of Mexico natural gas production (which had been 10 billion cubic feet per day).

EIA released its monthly Short-Term Energy Outlook on Wednesday, September 7. Because considerable uncertainty remains regarding the extent of Katrina's damage, EIA established three basic recovery scenarios to represent a range of plausible outcomes for oil and natural gas supply over the next several months and through 2006: (1) Fast Recovery, which assumes a very favorable set of circumstances for getting supplies back to normal; (2) Slow Recovery, which assumes that significant outages in oil and natural gas production and delivery from the Gulf area continue at least into November; and (3) Medium Recovery, which assumes a path in between Slow and Fast Recovery.

Petroleum
As of the close of trading on Tuesday, September 13, crude oil prices were slightly lower, while petroleum product futures prices were higher, compared to the closing prices from Monday, September 12. The gasoline near-month futures price was up by 1.8 cents per gallon from Monday, settling at 189.2 cents per gallon, while the heating oil near-month futures price was up 2.7 cents per gallon, settling at 184.1 cents per gallon. The NYMEX West Texas Intermediate (WTI) crude oil futures price was down $0.23 per barrel from Monday, settling at $63.11.

Currently, there are five refineries (ChevronTexaco, located in Pascagoula, MS; ConocoPhillips, located in Belle Chasse, LA; ExxonMobil, located in Chalmette, LA; Murphy, located in Meraux, LA, and Shell Chemical in St. Rose, LA) that remain shut down, and expectations are that the first four of these refineries, which represent about 5 percent of total U.S. refining capacity, could be shut down for an extended period. The Shell Chemical refinery in St. Rose, LA is expected to begin operations soon.

On September 12, DOE released the weekly Gasoline and Diesel Fuel Update. As of September 11, the average weekly retail gasoline price decreased to $2.95 (down 11.4 cents from the previous week). Diesel fuel prices decreased 5.1 cents to $2.84.

The next Weekly Petroleum Status Report (WPSR), with information on petroleum markets for the week ending September 9, will be published on Wednesday, September 14. This will reflect the second week of post-Katrina data.

Natural Gas
The natural gas futures price for October delivery was down $0.27, to reach $10.76 per million Btu as of the close of trading today, Tuesday, 9/13. In trading on the Intercontinental Exchange, the Henry Hub spot price was $10.69 per MMBtu, up $0.02 from Monday, September 12. This price is 89 cents above the average spot price of $9.80 per MMBtu for the week ending Friday, August 26, before the storm. At market locations across the Gulf region, price increases today ranged up to $0.30 per MMBtu with an average increase of $0.08 per MMBtu. The overall average increase in price was $0.15 per MMBtu.

El Paso reported damage to both its Tennessee Gas Pipeline and Southern Natural Gas system that affects a total of 1.25 Bcf/d in capacity. Approximately 3 billion cubic feet per day was initially shut-in on El Paso's three natural gas pipeline systems in the Gulf of Mexico as a result of Hurricane Katrina. Currently, there are 700 million cubic feet per day (MMcf/d) of production shut-in on Tennessee Gas Pipeline (TGP) and 550 MMcf/d on Southern Natural Gas (SNG). ANR Pipeline has returned to full capacity.

Ports and Pipelines
While the Colonial and Plantation petroleum product pipelines are back up and able to run at 100 percent of capacity, supplying the pipelines with products may become an issue as long as some of the refineries that supply product into these pipelines remain shut down. The Capline, a major crude oil pipeline that supplies crude oil from the Gulf Coast to some Midwest refineries, is now operating at more than 90 percent of its capacity.

The Louisiana Offshore Oil Port (LOOP) is expected to be at 100 percent of capacity by the end of this week, after Port Fourchon becomes operational. More than 10 percent of the nation's imported crude oil typically enters via the LOOP.