As of Thursday, September 15, 3:00 pm

According to the Minerals Management Service (MMS), as of 11:30 September 15, Gulf of Mexico oil production was reduced by 842,091 barrels per day as a result of Hurricane Katrina, equivalent to 56.14 percent of daily Gulf of Mexico oil production (which had been 1.5 million barrels per day). The MMS also reported that 3.411 billion cubic feet per day of natural gas production was shut in, equivalent to 34.11 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, taking into consideration three Hurricane Katrina recovery scenarios.

Petroleum
As of the close of trading on Thursday, September 15, crude oil and petroleum product prices were lower, compared to the closing prices from Wednesday, September 14. The gasoline near-month futures price was down by 3.9 cents per gallon from Wednesday, settling at 189.9 cents per gallon, while the heating oil near-month futures price was down 1.3 cents per gallon, settling at 191.2 cents per gallon. The NYMEX West Texas Intermediate (WTI) crude oil futures price was down $0.34 per barrel from Wednesday, settling at $64.75.

Currently, there are four refineries (ChevronTexaco, located in Pascagoula, MS; ConocoPhillips, located in Belle Chasse, LA; ExxonMobil, located in Chalmette, LA; and Murphy Oil, located in Meraux, LA) that remain shut down, and expectations are that these refineries, which represent about 5 percent of total U.S. refining capacity, could be shut down for an extended period.

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.

As of September 9 (the most recent data available), the end of the second week following Hurricane Katrina, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) fell by 6.6 million barrels from the previous week. At 308.4 million barrels, U.S. crude oil inventories remain above the upper end of the average range for this time of year. Total motor gasoline inventories rose by 1.9 million barrels last week, putting them at the bottom end of the average range. Distillate fuel inventories decreased by 1.1 million barrels last week, and are above the upper end of the average range for this time of year. Total commercial petroleum inventories dropped by 4.1 million barrels last week, and are in the upper half of the average range for this time of year. Total product supplied over the last four-week period has averaged nearly 21.0 million barrels per day, or 0.4 percent more than averaged over the same period last year.

Natural Gas
The natural gas futures price for October delivery was up $0.17, to reach $11.34 per million Btu as of the close of trading today, Thursday, September 15. In trading on the Intercontinental Exchange, the Henry Hub spot price was $11.24 per MMBtu, up $0.44 from Wednesday, September 14. This price is $1.44 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 $0.74 per MMBtu with an average increase of $0.43 per MMBtu. The overall average increase in price was $0.32 per MMBtu.

In its Natural Gas Weekly Update, EIA today reported that natural gas spot prices have increased across much of the Lower 48 States since last Wednesday, September 7, as continued reduction in natural gas production supported price increases on most spot market locations outside the Gulf coast region. On the week, the largest increases tended to cluster in the Midwest, Northeast, and Midcontinent regions. EIA also reported that working gas in storage increased to 2,758 Bcf as of Friday, September 9, which is 3.7 percent above the 5-year average inventory level for the report week. The implied net injection of 89 Bcf is 3 percent above the 5-year average of 86 Bcf. It is also the largest net injection since the beginning of July, and marks the first time since late June that the implied net injection has exceeded the 5-year average.

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 still 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.