Oil in Global Economy Series: Hurricane Michael takes down 0.72 million barrels oil production

The hurricane Michael, which made a landfall in the panhandle, Florida with a wind speed of 155 miles per hour and now gradually moving north as a tropical storm is set to dent next week’s production report from United States’ Energy Information Administration (EIA).

According to reports, Michael has led to a shutdown of as many as 89 oil platforms in the Gulf of Mexico, producing 40 percent of oil in the region. As of the latest report, the shut-in production totaled 0.72 million barrels per day. In addition to the oil, more than 800 million cubic feet of natural gas production has also been taken offline this week.

Oil traders are advised to keep an eye on the storm updates as the U.S. is undergoing the hurricane season and last year, with hurricane Harvey taking down most of the refining capacity in the Gulf of Mexico last year or one-fifth of national refining capacity, we have seen the impact on Gasoline price, which sharply shot up.

It is currently forecasted that at least 14 storms would hit the United States in this hurricane season, which is up by three from the last forecast.