From Platt's The Barrel blog:
As Tropical Storm Ernesto
veers away from Gulf of Mexico production and the market shrugs off this
force of nature, one has to wonder: Will hurricanes ever affect the gas
markets again?
The last time gas markets--both spot and futures--reacted sharply to
such storms was the year of Katrina and Rita, when hurricanes
effectively took out the benchmark Henry Hub and its surrounding
infrastructure.
That same year, GOM production went from a seven-year high of 10.63
Bcf/d (16.4% of total US production) to 4.35 Bcf/d once the storms
struck, according to Energy Information Administration data.
NYMEX gas prices went
screeching on the supply shortfall to a high of $14/MMBtu and Henry Hub
to the high $13.60s/MMBtu later that year, .
Hurricanes have since had little impact on GOM production for one
single reason: shale. Why risk a supply cut-off when supplies can be
gotten onshore? In some cases, they're very far onshore.
Take a look at the next times after Katrina and Rita that GOM production took a battering: hurricanes Gustav and Ike in 2008....MORE
