For Oil Refineries, Isaac Was 'Mostly A Nonevent'

The major oil companies are looking to restart oil production in the Gulf of Mexico as quickly as possible, now that Isaac has passed. With nearly all the production platforms shut down, many people expected to see a rise in oil prices. But instead, they fell.

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STEVE INSKEEP, HOST:

Apparently the oil market is alright too. Now that Isaac has passed, the major oil companies are looking to restart production in the Gulf of Mexico. With nearly all the production platforms shut down, many people expected to see a rise in oil prices. But instead we've seen in the last few days what looks like the typical movement of the market - a little down one day, a little up the next.

Isaac is proving far less disruptive than Hurricanes Katrina or Ivan. Here's NPR's Yuki Noguchi.

YUKI NOGUCHI, BYLINE: When Hurricane Ivan, a Category 5 hurricane, swept through the Gulf Coast eight years ago, it took a huge toll. Pipelines were severed. Drill rigs were unmoored. And oil production was badly disrupted. The damage from Hurricane Isaac looks to be minimal by comparison.

JOHN KINGSTON: I really think that Isaac, in terms of oil, is going to end up being mostly a non-event.

NOGUCHI: John Kingston is news director for Platts, an energy-information division of McGraw-Hill. He says last week, in anticipation of the hurricane, investors worried about scarcity pushed oil prices up. But then on Wednesday, after Isaac made landfall, the government's Energy Information Administration said crude supply was much better than what the market was expecting. And that, Kingston said, changed everyone's tune.

KINGSTON: Nobody was really talking about Isaac. They were talking about the EIA stats, which surprised everybody.

NOGUCHI: The precautionary shutdown took about 15 percent of the country's refining capacity off line. But unless those refineries experience protracted power outages, Kingston and other analysts expect them to come back online soon.

Allen Good is senior equity analyst with Morningstar, an investment research firm. He says that in any event, the U.S. energy market is a lot less vulnerable to tropical storms than in the days of Ivan and Katrina.

ALLEN GOOD: A lot has changed really in the oil and gas markets, particularly in the U.S., since that time. You certainly have a lot more oil and particularly natural gas production that comes from on-shore resources, so you're not nearly as dependent on off-shore Gulf Coast resources.

NOGUCHI: But hurricanes still generate headlines and stir up fear in the market, and that dynamic, Good says, is unchanged. Yuki Noguchi, NPR News, Washington.

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