Supply Concerns Elevate Futures (coastal, ANWAR drilling out of committee)

WP: Supply Concerns Elevate Futures
Storms May Have Lasting Effect On Operations

By Justin Blum
Washington Post Staff Writer
Thursday, September 29, 2005; Page D01


Gasoline and natural gas prices soared on the futures markets yesterday as traders grew concerned that energy operations damaged by hurricanes Rita and Katrina could be hobbled longer than expected.

Analysts said that if futures prices remain at elevated levels, national pump prices for a gallon of regular could move above $3 a gallon, as they did following Hurricane Katrina. They added that a run-up in natural gas prices likely will mean increases for winter heating bills.

The Energy Department's Energy Information Administration said yesterday that 15 percent of U.S. refiners' ability to produce gasoline, jet fuel and other oil products "could be out for at least another couple of weeks" because of Rita and Katrina. In addition, the Minerals Management Service reported that 80 percent of natural gas production in the Gulf of Mexico remained shut down yesterday because of the hurricanes.

The higher futures prices came on the same day that two House committees took up Republican legislation designed to encourage refiners to build more plants and to spur more domestic oil and natural gas production. Supporters said the measures eventually would help bring down consumer prices. Some of the provisions had been considered -- and rejected -- as part of consideration of a broad energy bill that was signed by President Bush in August.

The Resources Committee sent to the full House a measure that opens to natural gas drilling offshore areas that are now off limits; it allows states to override bans on new offshore oil drilling. The legislation also would open Alaska's Arctic National Wildlife Refuge to oil and natural gas development, a controversial measure that supporters said likely will be approved as part of the budget process....


http://www.washingtonpost.com/wp-dyn/content/article/2005/09/28/AR2005092800413.html

Cimarex Energy Says Gas Production Remains Shut-in
Wednesday, September 28, 2005

Of total remaining shut-in volumes, approximately 65 MMcfe/d is from Gulf of Mexico fields and 60 MMcfe/d is from wells located in Vermilion Parish, Louisiana, Liberty County, Texas and other areas along the Texas Gulf Coast. Included in the total amount of shut-in offshore volumes is 14 MMcfe/d that was initially curtailed on August 28 because of Hurricane Katrina.
Preliminary inspections of operated facilities and reports from other operators indicate little to no apparent damage to affected production facilities. As such, current general expectations are that the bulk of the Hurricane Rita related curtailments should be back online within two weeks. However, because of extensive flooding and the requisite start-up of downstream trucking operations, gas transportation pipelines, gas processing plants and offshore production facilities managed by others, the exact timing of the resumption of output is still being assessed and may change.>>

http://www.rigzone.com/news/article.asp?a_id=25612

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Helmerich & Payne Sees No Significant Damage from Hurricane Rita
Monday, September 26, 2005

Helmerich & Payne does not expect any significant damage to its offshore platform rigs as a result of Hurricane Rita. Furthermore, the Company's onshore rigs, construction operations and facilities in the area impacted by the hurricane appear to have suffered little damage. Since Company personnel were evacuated from offshore platforms and other onshore areas in Rita's projected impact zone, no personal injuries were sustained. >>

http://www.rigzone.com/news/article.asp?a_id=25552
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Whittier Energy Escapes Hurricane Rita Damage
Wednesday, September 28, 2005


Whittier Energy says that none of its major oil and gas fields suffered any significant physical damage from either Hurricane Katrina or Hurricane Rita. However, as a result of power outages, limited access, and the inability of some oil and gas marketers to take delivery of production in affected areas, approximately 3.2 million cubic feet of gas equivalent ("Mmcfe") per day, or 20%, of Whittier's daily net production is currently shut-in. The Company anticipates that the majority of its shut-in production will be restored over the next few weeks and does not expect any materially adverse impact on its operations. >>

http://www.rigzone.com/news/article.asp?a_id=25606
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Crimson Exploration Effects of Hurricane Rita Minimal
Wednesday, September 28, 2005


Crimson Exploration has preliminary assessments of physical damage from Hurricane Rita on its south Louisiana and Texas gulf coast properties appears to be minimal. Production, however, remains shut-in pending restoration of electrical power to, and the commencement of operations by, the operators of sales lines through which the Company delivers its production. Details of those estimated effects are as follows: >>

http://www.rigzone.com/news/article.asp?a_id=25619

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http://www.rigzone.com/

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Oil Drops as Texas Refining Center Escapes Damage From Rita

Sept. 25 (Bloomberg) -- Crude oil fell to its lowest in almost two weeks in London and dropped in New York after the U.S. refining center near Houston escaped a direct hit from Hurricane Rita, easing concern of a shock to strained fuel supplies.

Saudi Arabia's oil minister, Ali al-Naimi, today said he was ``relieved'' after only three U.S. refineries reported damage when Rita came ashore yesterday in Louisiana, near the Texas border. The storm was downgraded to a tropical depression late yesterday. At least two of the eight Houston-area plants that account for 12 percent of U.S. refining capacity may resume production this week.

``The panic is over,'' said Rob Laughlin, a senior broker at Man Financial, a unit of the world's largest hedge-fund company, in London. ``The U.S. oil-products market should start balancing out in coming days, allowing crude to easily come down through $60 a barrel.''

Brent crude for November settlement fell 95 cents, or 1.5 percent, to $61.49 a barrel on London's International Petroleum Exchange, the lowest since Sept. 13. November crude on the New York Mercantile Exchange dropped as much as $1.19, or 1.9 percent, to $63, the lowest since Sept. 16, as trading began at 10:00 a.m. Both exchanges opened for special Sunday sessions because of Rita.

Crude futures in New York have declined 11 percent since touching a record $70.85 a barrel on Aug. 30, the day after Hurricane Katrina struck Louisiana. That storm became the most expensive natural disaster in U.S. history, costing insurers as much as $60 billion.

Rita Claims

Rita, in contrast, may lead to claims of up to $6 billion, according to Eqecat Inc., a storm modeler. Katrina struck land before the Labor Day weekend, the end of the peak season for gasoline demand. Refiners now are preparing to meet heating-fuel demand in the fourth quarter, while replenishing gasoline supplies.

Al-Naimi, in Johannesburg for the World Petroleum Congress, said none of Saudi Arabia's customers in the Gulf of Mexico was affected by Hurricane Rita. The kingdom is the world's largest oil exporter.

At least 15 refineries in Texas and Louisiana, accounting for about 24 percent of U.S. capacity, shut as Rita approached. Valero Energy Corp. said its Houston and Texas City plants may restore processing within seven days. Another 5 percent of the nation's refining capacity remains closed from Katrina, with four plants scheduled to resume output in November or December. ...

http://www.bloomberg.com/apps/news?pid=10000102&sid=aTQX9XnqievI&refer=uk