Hurricane Delta steams across the Gulf of Mexico, halting 80% of oil output

Workers remove a sunshade in preparation for the arrival of Hurricane Delta, in Puerto Morelos, Quintana Roo state, Mexico on October 6, 2020.

Elizabeth Ruiz | AFP | Getty Images

Hurricane Delta began its march through prime U.S. offshore oil-producing areas in the U.S. Gulf of Mexico on Thursday as energy companies moved drilling rigs and pulled workers off platforms.

The storm, expected to intensify over the Gulf’s warm waters to a Category 3 hurricane with winds of 115 miles per hour (185 kmh), has halted 80% of the region’s offshore oil and nearly 50% of its natural gas output.

Offshore producers including Royal Dutch Shell, BP, Chevron and Occidental Petroleum pulled workers from platforms to safer quarters onshore.

The unusually high number of storms coupled with pandemic safety precautions has made this year a costly and difficult one for offshore producers.

Onshore oil and gas processing plants and energy ports from Port Arthur, Texas, to New Orleans also were battening down under tropical storm wind advisories. Louisiana Offshore Oil Port, the sole deepwater port on the Gulf of Mexico, halted seaborne exports and imports.

Delta was steaming at 17 mph over the Gulf after scraping across Mexico’s Yucatan peninsula and battering its resort areas. Louisiana sought and received a federal disaster declaration ahead of the storm’s arrival.

On the U.S. Gulf Coast, Shell began preparing three refineries in Convent, Geismar and Norco, Louisiana, for Delta’s arrival. Further west, other refineries were still under maintenance in the wake of prior hurricanes.

U.S. natural gas futures gained over 3% on Wednesday on the well closings and forecasts for larger-than-expected demand over the next two weeks. More than half a dozen liquefied natural gas (LNG) tankers were also waiting to enter U.S. export plants off the Louisiana coast.

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