Hurricane Irma Likely to Extend Harvey’s Impacts on U.S. Petroleum Production
Hurricane Irma is the second major hurricane to hit the U.S. in two weeks. Irma follows Hurricane Harvey, which shut down a quarter of U.S. refineries and 8 percent of U.S. oil production. Crude prices have slumped, as the outages reduce demand for crude. The trend continued into the weekend as of Friday, 9/8/17.
Recovery to full production capacity was already expected to take weeks following Hurricane Harvey. Hurricane Irma has further disrupted shipping in the U.S. Gulf Coast areas, which has impacted shale producers as well. In addition, the damage in the Florida area caused by Hurricane Irma is expected to further reduce energy demands in the short term. As a result of falling crude prices induced by the storms, U.S. energy firms have reduced spending plans. This follows a 14-month recovery in drilling production.