Oil markets flat as restarts begin at storm-hit energy operations

HOUSTON (Reuters) - Energy companies on Friday continued efforts to restore operations at U.S. Gulf Coast offshore platforms and refineries shut by Hurricane Laura as oil markets largely shrugged off the storm’s impact.

Satellite imagery showing Lake Charles regional airport after Hurricane Laura hit, in Lake Charles, Louisiana, U.S. in this August 27, 2020 handout photo. Satellite image ©2020 Maxar Technologies/Handout via REUTERS

Some 300 offshore production facilities and half-dozen refineries were halted ahead of a Category 4 storm that hit the coast of Louisiana with winds of 150 mile per hour (240 kph). The destructive winds cut a narrow path through the area.

Citgo Petroleum said its [PDVSAC.UL]s 418,000-barrel per day Lake Charles, Louisiana, plant sustained wind damage that will take days to assess, preventing an immediate restart.

Sources familiar with operations at the Lake Charles refinery said the hurricane caused extensive damage which would require four to six weeks to repair.

Motiva Enterprises, operator of the largest U.S. refinery, and Valero Energy Corp began restarting their Port Arthur, Texas, refineries.

U.S. crude futures traded at $42.97 per barrel, down 3 cents and up slightly from $42.34 a week ago. U.S. gasoline futures were up about 3 cents, 2% higher than a week ago.

About 84%, or 1.56 million barrels per day, of U.S. Gulf of Mexico crude output and 60% of natural gas offshore production were shut on Friday. Crews have returned to 42 platforms, U.S. Department of Interior data showed.

Exxon Mobil Corp said its 369,024 bpd Beaumont, Texas, refinery, about 50 miles (80 km) west of the storm’s landfall, required “minor repairs,” a spokesman said. The company was taking steps to restart once power and port operations were restored.

Cheniere Energy Inc’s and Cameron LNG’s Cameron liquefied natural gas plants in Louisiana took almost no pipeline gas early on Friday, according to preliminary data from Refinitiv.

“Refiners may be reluctant to quickly return to production when the product they make is a money losing proposition,” Robert Yawger, director of energy futures at Mizuho Securities, wrote on Friday.

The ports of Beaumont, Orange and Sabine, Texas, and Cameron and Lake Charles, Louisiana, remained closed on Friday, according to the U.S. Coast Guard.

Houston, the United States’ largest energy export port, restarted operations on Thursday and had about 19 vessels waiting on Friday afternoon to reenter the port.

One-way movement and other restrictions were in place on Friday at points along the Houston Ship Channel, according to the U.S. Coast Guard.

(This story refiles to fix penultimate paragraph to reflect that vessels were waiting to enter Houston on Friday afternoon, not Thursday)

Reporting by Erwin Seba; writing by Gary McWilliams; Editing by Marguerita Choy and David Gregorio