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Storm Edouard shuts refinery, hits shipping
HOUSTON (Reuters) - Tropical Storm Edouard disrupted shipping, cut refinery production and shut some offshore oil and natural gas output on Monday as it churned across the Gulf of Mexico toward landfall along the upper Texas Coast on Tuesday
U.S. crude oil futures hit a three-month low of $119.50 a barrel on Monday before settling down $3.69 at $121.41 as signs of a slowing U.S. economy and rising supply from OPEC outweighed storm fears.
So far, Edouard has closed only 0.9 percent of crude oil production and 7.2 percent of natural gas output, according the U.S. Minerals Management Service.
The Gulf of Mexico supplies about a quarter of U.S. crude oil output and 15 percent of its natural gas, while Gulf Coast refiners make about a quarter of domestic gasoline.
Energy companies evacuated staff from offshore platforms due to Edouard, the second named storm of the season to threaten oil operations in the Gulf of Mexico, with Apache shutting a small amount of output.
Apache shut 8,600 barrels per day of oil output and 130 million cubic feet per day of natural gas production after evacuating 110 personnel from facilities off Louisiana.
Marathon shut its 76,000 bpd Texas City, Texas refinery and Valero Energy Corp said production was cut at its 245,000 bpd Texas City and 100,000 bpd Houston refineries because crude tankers couldn't reach the ports of Houston and Port Arthur.
"We have started an orderly shut-down in preparation for the storm," said Marathon spokeswoman Angela Graves.
The Louisiana Offshore Oil Port, the only deep-water U.S. oil port and a major conduit for the country's crude oil imports, temporarily suspended offloading oil tankers in the Gulf of Mexico due to high waves and winds.
The port's onshore storage continued to supply refiners with crude on-hand, however, a spokeswoman said.
Packing 50 miles per hour (85 kph) winds, Edouard swept across the northern Gulf of Mexico about 80 miles south-southwest of Grand Isle, Louisiana.
The storm has a 20 percent chance of reaching hurricane speeds of 74 mph before it makes landfall on Tuesday near Galveston, Texas, the U.S. National Hurricane Center said.
At its predicted strength, Edouard is unlikely to do much damage to coastal area refineries that were swamped by the storm surge from hurricanes Rita and Katrina in 2005, said Kenneth Medlock, an energy fellow with Rice University's Baker Institute.
Some refineries are on the "dirty side" of the storm's projected landfall, where winds are the most damaging. But "I do not think it will matter much," Medlock said. "The swell won't likely be big enough to do sustained damage."
A series of powerful hurricanes in 2004 and 2005, including Hurricane Katrina, toppled oil rigs and severed pipelines in the Gulf, pushing oil prices to then-record highs.
(Reporting by Erwin Seba, Chris Baltimore, Haitham Haddadin, Richard Valdmanis, Robert Campbell; Editing by Marguerita Choy)
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