Oct. 7, 2004
NEW YORK, (Reuters) - Nearly 28 percent of oil output from the U.S. Gulf of Mexico remains shut down after last month's Hurricane Ivan damaged drilling platforms, the U.S. Minerals Management Service said on Thursday.
The amount of oil being lost per day is about the same as the United States imports daily from OPEC member Algeria, the seventh leading supplier to the United States, according to the industry group the American Petroleum Institute.
More than 475,100 barrels per day of the gulf's 1.7 million bpd crude production was shut as of Thursday morning, an improvement of about 3,000 barrels from Wednesday, the MMS said.
The outage from the gulf, which provides about 25 percent of oil produced in the United States, has helped push U.S. crude oil prices to a record $53 per barrel.
"This is a market that has posted gains 14 of the last 16 sessions and it's basically Hurricane Ivan and some Nigerian headlines," said Tim Evans, analyst at IFR Energy Services in New York, about labor and ethnic strife in the African OPEC member.
A total of nearly 16.6 million barrels has been shut in the gulf since Sept. 11 by Ivan -- the equivalent to 83 percent of the oil -- domestic and imported -- the United States uses in one day.
SWEET AND SOUR BARRELS
Roughly two-thirds of the barrels still offset by Ivan are high quality, low sulfur "sweet" barrels, said Michael Rothman, analyst at Merrill Lynch in New York. Sweet crude is the only kind of oil that can be refined by some plants.
MMS said it does not keep records on the ratio of sweet to high sulfur "sour" crude of the shut gulf barrels.
Since Ivan's impact cut supply, the government has made rare loans to five refineries of sweet crude from national emergency reserves. Traders say at least one more company is asking the government for a loan.
About 1.78 billion cubic feet per day, or 14.43 percent, of natural gas production is still out in the Gulf of Mexico, MMS said. Gas production reported by MMS was also slightly up since Tuesday.
A total of 72.3 billion cubic feet of natural gas has been shut in the Gulf by Ivan.
The daily MMS production report includes data reported by companies up to 12:30 EDT (1630 GMT).
(Additional reporting by Robert Gibbons in New York)
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