NEW YORK (CNNMoney) -- Tropical Storm Isaac is curtailing oil production along the Gulf of Mexico and threatening refineries, which could send already rising gasoline prices up another 10 cents in the coming week.
The U.S. Bureau of Safety and Environmental Enforcement, which oversees offshore oil production, said Sunday that nearly 25% of the current daily oil production in the Gulf of Mexico has been shut, with nearly 50 rigs and oil platforms already evacuated in advance of the storm.
In addition, more than 8% of natural gas production in the Gulf has also been halted.BP (BP) said it is evacuating workers and temporarily shutting down output at all of its production platforms in the Gulf.
Royal Dutch Shell (RDSA) said it is evacuating its platforms in the eastern Gulf, and has started to remove nonessential workers from the central Gulf area.
Chevron (CVX, Fortune 500) has started to remove some staff from its offshore facilities as well, though the company said its production and refinery output has not yet been affected.
Apache Corp. (APA, Fortune 500) and Anadarko Petroleum (APC, Fortune 500) also confirmed they were evacuating staff from their offshore facilities.
Exxon Mobil (XOM, Fortune 500) said it is monitoring forecasts to determine which facilities it may need to shut, and is already evacuating nonessential personnel from offshore locations.
If Isaac reaches hurricane status, it could lead to refinery shutdowns along the Gulf Coast, which would lead to higher gasoline prices and hurt drivers who have already been dealing with gas prices at their highest level since early May.
The average prices of a gallon of regular gas hit $3.75 Monday, according to motorist group AAA.
Prices have gained more than 7% in August but are still down nearly 9% from the July 2008 record of $4.114.
Gas prices were already moving higher this month, partly due to refining and transportation problems across the Midwest and West Coast. Worries about Iran and chaos in Syria haven't helped.
Prices could shoot up another 10 cents fairly quickly if it looks like refineries will need to start shutting down, according to Tom Kloza, chief oil analyst for the Oil Price Information Service, which tracks prices for AAA.
But prices could just as quickly come back down within a week or two after Isaac passes through. "There's panic right now that this could stage a direct hit on New Orleans or the Chevron refinery in Pascagoula [Mississippi]," he said.
"The refineries, once they're within 24 hours of either tropical storm or hurricane force winds, they have to start a shutdown. You can't just flip a switch.
But this should not be a Katrina-like event."While the eye is expected to pass well west of Tampa, site of this week's Republican National Convention, the National Hurricane Center issued a tropical storm warning from Intracoastal City, La., to Morgan City, La.
That means the storm is on track to possibly hit much of the refining capacity near and around New Orleans, following a path very similar to that of Hurricane Katrina in 2005.
When Hurricane Katrina swept through, the average price of regular gas quickly spiked to a record high. And while it took about two months for gas prices to come back down, most hurricanes don't reach Katrina's magnitude.
Meanwhile, U.S. crude oil prices fell $1.28 to $94.88 a barrel early Monday. Isaac hit Cuba and the Florida Keys Sunday before moving into the Gulf of Mexico.
cnn.com
The U.S. Bureau of Safety and Environmental Enforcement, which oversees offshore oil production, said Sunday that nearly 25% of the current daily oil production in the Gulf of Mexico has been shut, with nearly 50 rigs and oil platforms already evacuated in advance of the storm.
In addition, more than 8% of natural gas production in the Gulf has also been halted.BP (BP) said it is evacuating workers and temporarily shutting down output at all of its production platforms in the Gulf.
Royal Dutch Shell (RDSA) said it is evacuating its platforms in the eastern Gulf, and has started to remove nonessential workers from the central Gulf area.
Chevron (CVX, Fortune 500) has started to remove some staff from its offshore facilities as well, though the company said its production and refinery output has not yet been affected.
Apache Corp. (APA, Fortune 500) and Anadarko Petroleum (APC, Fortune 500) also confirmed they were evacuating staff from their offshore facilities.
Exxon Mobil (XOM, Fortune 500) said it is monitoring forecasts to determine which facilities it may need to shut, and is already evacuating nonessential personnel from offshore locations.
If Isaac reaches hurricane status, it could lead to refinery shutdowns along the Gulf Coast, which would lead to higher gasoline prices and hurt drivers who have already been dealing with gas prices at their highest level since early May.
The average prices of a gallon of regular gas hit $3.75 Monday, according to motorist group AAA.
Prices have gained more than 7% in August but are still down nearly 9% from the July 2008 record of $4.114.
Gas prices were already moving higher this month, partly due to refining and transportation problems across the Midwest and West Coast. Worries about Iran and chaos in Syria haven't helped.
Prices could shoot up another 10 cents fairly quickly if it looks like refineries will need to start shutting down, according to Tom Kloza, chief oil analyst for the Oil Price Information Service, which tracks prices for AAA.
But prices could just as quickly come back down within a week or two after Isaac passes through. "There's panic right now that this could stage a direct hit on New Orleans or the Chevron refinery in Pascagoula [Mississippi]," he said.
"The refineries, once they're within 24 hours of either tropical storm or hurricane force winds, they have to start a shutdown. You can't just flip a switch.
But this should not be a Katrina-like event."While the eye is expected to pass well west of Tampa, site of this week's Republican National Convention, the National Hurricane Center issued a tropical storm warning from Intracoastal City, La., to Morgan City, La.
That means the storm is on track to possibly hit much of the refining capacity near and around New Orleans, following a path very similar to that of Hurricane Katrina in 2005.
When Hurricane Katrina swept through, the average price of regular gas quickly spiked to a record high. And while it took about two months for gas prices to come back down, most hurricanes don't reach Katrina's magnitude.
Meanwhile, U.S. crude oil prices fell $1.28 to $94.88 a barrel early Monday. Isaac hit Cuba and the Florida Keys Sunday before moving into the Gulf of Mexico.
cnn.com
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