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clv101

Katrina

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This could be very serious.

Katrina Grows To Cat. 3 Storm, Targets Gulf States

..."There is nothing out there to slow it down," Local 6 meteorologist Michele Cimino said. "There are no waters to churn it up, no lands to slow it down, so what is going to happen is it will continue to build as it makes that turn."...Local 6 meteorologists Michele Cimino and Tom Sorrells said the storm could grow even stronger than a Category 4 storm if it remains in the Gulf. "Now we are talking about a very dangerous Category 4 storm," Sorrells said. "It could become the nastiest thing in the Gulf of Mexico since Camille in the 60s. This is a bad storm."

--More--

Here's the latest map:

144929W_sm.gif

Updates available here: http://www.nhc.noaa.gov/refresh/graphics_a...5105.shtml?5day

So why is this so serious? Well, take a look at this map of oil rigs off the Louisiana coast:

LAX.jpg

http://www.rodnreel.com/gps/semisub.asp

And this map of Louisiana's refineries:

image002.jpg

http://tonto.eia.doe.gov/oog/info/state/la.html

The oil price could go through the roof when the market opens on Monday.

Edited by clv101

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The oil price could go through the roof when the market opens on Monday.

On the other hand, I think a fair amount of this risk is already priced in. It's been expected for a while that the hurricane would impact oil in the Gulf.

Of course if it _does_ seriously stuff up some rigs or refineries, it could cause a big increase in oil prices.

Edited by MarkG

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On the other hand, I think a fair amount of this risk is already priced in. It's been expected for a while that the hurricane would impact oil in the Gulf.

Of course if it _does_ seriously stuff up some rigs or refineries, it could cause a big increase in oil prices.

I looked more like it was going to track back up the west coast of Florida on Thu/Fri, it's only more recently that the oil infrastructure looks to be in the firing line. The oil markets were pretty calm on Friday.

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On the other hand, I think a fair amount of this risk is already priced in. It's been expected for a while that the hurricane would impact oil in the Gulf.

Of course if it _does_ seriously stuff up some rigs or refineries, it could cause a big increase in oil prices.

Will this be anywhere near cancun (Mexico) ?

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I'm really glad I didn't buy that house in Florida now.

I wish they would be more adventurous with naming of these storms though - perhaps the next one could be called 'Jennifer' with the following one being named 'Angelina'...

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Will this be anywhere near cancun (Mexico) ?

mexico_cancun.gif

Cancun is just near the 'M' of 10 AM SAT on the top map... I guess it might have been a bit windy today but nothing to worry about going forwards.

Edited by clv101

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There will probably already be some loss of oil production due to evacuation of platforms, pipeline shutdowns etc. Production will be restored, assuming there is no actual damage to oil infrastructure, relatively quickly once the storm passes. The markets MAY have priced this in.

IF there is actual damage then disruption to production would be for a much longer time. In the case of older, more depleted fields they may be abandoned altogether in the event of severe damage such that production would never fully recover to what it otherwise would have been. The market almost certainly has NOT priced in such an occurrence.

From an overall oil industry perspective the most serious thing in the short term would be anything that shuts a refinery. Loss of power being the most likely. The spare capacity just isn't there.

All we can do at the moment is wait and see.

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Oil could go to $80 next week if this forecast is correct.

Of course refineries will shut as a precaution and the spike would likely be temporary.

The real impact would be if they sustain any serious damage that takes time to rebuild.

Edit: - top graphics clv101.

Edited by Culpability Brown

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Guest magnoliawalls

From the link CLV 101 provided above

Looks like most of the oil rigs are in the 20 -49% probability zone and most of the refinerys are in the 10 - 19% zone.

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I was surprised the hurricaine is such a big issue in the oil markets until I looked the figures up:

"According to the Oil and Gas Journal, the United States had 21.9 billion barrels of proved oil reserves as of January 1, 2005, eleventh highest in the world. These reserves are concentrated overwhelmingly (over 80%) in four states. As of December 31, 2003, Texas had 22% of total US oil reserves, Louisiana had 22%, Alaska 20%, and California 18% (note: all of these figures include onshore plus Federal and state offshore reserves). U.S. proven oil reserves have declined some 17% since 1990, with the largest single-year decline (1.6 billion barrels) occurring in 1991.

The United States contains over 500,000 producing oil wells, the vast majority of which are considered "marginal" or "stripper" wells, generally producing only a few barrels per day of oil. During 2003, top oil producing areas included the Gulf of Mexico (1.6 million bbl/d), Texas onshore (1.1 million bbl/d), Alaska's North Slope (949,000 bbl/d), California (683,000 bbl/d), Louisiana onshore (244,000 bbl/d), Oklahoma (178,000 bbl/d), and Wyoming (143,000 bbl/d)."

I guess with the lack of global refinery capacity refinery loss in Louisiana would compound the situation. And the fact that the USA consumes it's own oil. If production is damaged it would have to buy more on the international markets.

I can now see why this is a problem.

Edited by Starcrossed

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Of course refineries will shut as a precaution and the spike would likely be temporary.

See the HPC 'news blog':

http://www.guardian.co.uk/business/story/0...1556121,00.html

"Storms that could damage production in the Gulf of Mexico also contributed to the latest bounce in prices. Gulf production accounts for around 30% of US output and refineries have shut down as a precautionary measure against hurricanes."

The refineries have (at least according to the Guardian) _already_ shut down: that's one reason why the oil price went up last week.

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Guest magnoliawalls

I don’t remember where I heard this and I could be wrong but doesn’t over a third of the oil production in the US come from the Gulf of Mexico?

If that is true even a short term disruption should have a significant impact. This could be a trigger...

Edit to add - has anything like this happened before? If so what were the effects on oil price?

Edited by magnoliawalls

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I wish they would be more adventurous with naming of these storms

I assume whoever named this one was having a little fun. Surely you must remember Katrina and the Waves? Very appropriate name if you ask me :-)

Andrew "walking on sunshine" McP

PS I like to think that this is their god's way of saying "And I'm going to *keep* doing this until you learn how to vote the right way!" Shouldn't joke really though, I wouldn't want to live in that region at this time of year... or any other, come to think of it.

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Katrina Cuts Oil Output by a Third

U.S. energy companies said U.S. Gulf of Mexico crude oil output was cut by more than one-third on Saturday as Hurricane Katrina appeared poised to charge through central production areas toward New Orleans.

The Gulf of Mexico is home to roughly a quarter of U.S. domestic oil and gas output, with a capacity to produce about 1.5 million barrels per day of crude and 12.3 billion cubic feet per day of gas.

MSN Money

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Guest Riser

Posted on ADVFN this morning that Katrina has been upgraded to CAT 4 it is going to be interesting on Monday. BBC the other month showed the link between the storms that hit the UK as famously reported by Michael Fish and the last UK stock market crash.

I wonder if this storms effect on the price of oil combined with Greenspans comments on Friday may be enough to destabalise the derivative markets. The DOW falls on Thusday were put down to the anouncing of an investigation into derivative trading. We also have a worsening situation in IRAQ and IRAN which could all contribute to a perfect storm in Monday markets :ph34r:

Oil price set to carry on rising on security and supply fears

THERE are three quite distinct elements to the current jump in oil prices, predicted by earlywarning six months ago, and the prospect of its steady continuation.

First come the short-term factors, including: a massive shortage in refinery capacity; the immediate upsurge in demand by China, and, to a lesser extent, India; Iraq's failure to increase production because of security problems; and slow and incompetent expansion of production in Siberia.

In addition, a windfall increase in revenues from higher prices as has been seen this year can reduce the pressure for exploration and greater production. Hanging over all this is the reluctance of producers to add to their reserves and raise output at more than a limited and artificial rate, mostly under terms set by Opec. These factors point to increasing prices in the months ahead.

Long-term influences include China's need for energy, demand from India and other developing economies and the continuing failure by Russia and Iraq to fulfil expectations on production.

Edited by Riser

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Here are the latest resutls from the GOMEX models:

91.1% of oil production down for 10 days or less, 68% for 10-30 days, 25% for 30 days or more.

GOMEX-Katrina LINK

If you add this all up then we're talking about quite a lot of oil especially when the lost production is compared to current US stockpiles.

Natural gas also warrants attention. North America is generally short on gas to start with and in fact the gas price tends to follow the oil price due to power plants and other industrial users switching between the two. There simply isn't enough gas supply for them to always use gas. It's not unusual to see 1 million barrels of oil per day being used in place of gas in US power plants.

So, any loss of GAS production ought to translate to increased OIL demand at a time of lower oil production. And this region under threat from the storm is a very big gas producer.

It is already becoming increasingly obvious in Australia that we are near some sort of "tipping point" with regards to oil prices. Business is warning of having to pass on some serious cost rises, driving habits have noticeably changed and this is increasingly well known and obvious, large vehicle sales are down etc. Jobs are going in the factorys building larger vehicles. Add that to the increasing house sales on decreasing price in Sydney and I think that in Oz at least an oil price surge could well be the "trigger" for an acceleration of the HPC so clearly underway (falling at about 1% per month) in Sydney right now. http://smh.com.au/news/national/lost-prope...4562804309.html

Trouble ahead and the oil markets haven't even really thought about the very high probability that the Northern hemisphere will in fact have a Winter in a few months. A winter that is likely to see oil demand above production capacity even without storm damage.

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Guest Riser

NOW CAT 5 - This Could be one nasty storm

US Weather Alert - Hurricane Katrina Now Category 5

Hurricane Katrina is an extremely dangerous Category 5 storm on the Saffir-Simpson scale. Maximum sustained winds have now been greatly increased to 160 mph. Katrina continues not only grow stronger, but it continues to grow larger. Hurricane force winds extend 75 miles from the center in all but the southwest quadrant of the system. The center of Katrina was 275 miles from the mouth of the Mississippi River at 4am CDT, but the hurricane force winds are only 200 miles from the coast.

Everyone along the northern Gulf of Mexico needs to take this hurricane very seriously and put action plans into play now. Hurricane warnings have now been hoisted from Morgan City, La., to the Florida-Alabama border. This includes the city of New Orleans and Lake Pontchartrain. A tropical storm warning and a hurricane watch have been issued from the Alabama-Florida border eastward to Destin, Florida and from west of Morgan City to Intracoastal City, Louisiana.

Katrina is forecast to turn to the northwest later this morning, then toward the north tonight. Well ahead of the center there will be very high surf crashing ashore in the northern Gulf starting Sunday night. You'll need to use extreme caution or just not go in the water at all along all of the northern Gulf beaches from Louisiana to western Florida due to this increased surf. Extreme damaging winds, high, life threatening storm surge, and deadly flooding rains with possible tornadoes are expected at landfall.

Effects from Katrina will not be confined to coastal areas. Once Hurricane Katrina makes landfall, it will progress inland Monday into Tuesday with a trail of flooding rains and damaging winds across Mississippi and Alabama and then into Tennessee. Torrential, flooding rainfall is possible with the remnants of Katrina well inland, possibly into the Ohio Valley, Great Lakes and the Northeast later this week........................

Posted on ADVFN this morning that Katrina has been upgraded to CAT 4 it is going to be interesting on Monday. BBC the other month showed the link between the storms that hit the UK as famously reported by Michael Fish and the last UK stock market crash.

I wonder if this storms effect on the price of oil combined with Greenspans comments on Friday may be enough to destabalise the derivative markets. The DOW falls on Thusday were put down to the anouncing of an investigation into derivative trading. We also have a worsening situation in IRAQ and IRAN which could all contribute to a perfect storm in Monday markets :ph34r:

Oil price set to carry on rising on security and supply fears

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Expect a lot of damage to homes and property, only houses here in South Florida are made (structure) to with stand 180mph winds. When the big storms head this way people are advised to stay put and sit it out if they live in a newish house, not so for the rest of the country.

Good luck to all

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Expect a lot of damage to homes and property, only houses here in South Florida are made (structure) to with stand 180mph winds. When the big storms head this way people are advised to stay put and sit it out if they live in a newish house, not so for the rest of the country.

Good luck to all

Staying put in NO isn't a great idea since it's below sea level. Do you think NO can be evacuated in time?

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