The oil industry prepares for tropical storm Isaac
Jeremy Hobson: Forecasters say Tropical Storm Isaac is on the verge of becoming a hurricane. And it’s expected to hit the Louisiana coast as soon as tonight.
But the storm has already shut down off-shore oil rigs in the gulf, as Marketplace’s Stephen Beard reports.
Stephen Beard: The energy companies are not taking any chances. They’ve shut down three quarters of oil production and half the natutal gas output from the Gulf. And they’ve closed a great swathe of the region’s refining capacity . But the weather forecasters have toned down their predictions: Issac is not expected to be as strong as Katrina seven years ago.
Nick Mcgregor, an oil analyst with stockbrokers Redmayne Bentley, says the oil markets are taking Isaac in their stride.
Nick Mcgregor: The industry and traders are used to seeing this capacity go off line for temporary periods for safety reasons when hurricane season is in hand . And they are relatively confident that this production tends to come back on line fairly quickly thereafter.
But he says the traders are not complacent. Hurricanes are unpredictable. Everyone knows that Isaac could damage oil and gas output. Katrina knocked out 4-and-a-half million barrels of refined oil a day.
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