Oil, gasoline prices rise as Ida kicks hurricane season into a higher gear

Published

3 years ago

August 31, 2021

admin

St. Bernard Parish residents fill up their cars and gas cans as the Louisiana coast prepares for the arrival of Hurricane Ida on Friday, Aug. 27, 2021 in New Orleans.

Chris Granger | The Times-Picayune | The New Orleans Advocate via AP

Hurricane Ida temporarily shut down a critical swath of U.S. oil production and refining operations, and that should keep crude and retail gasoline prices at already elevated levels.

Now a tropical storm, Ida swept across the Gulf of Mexico production area before slamming into the Louisiana coast Sunday as a Category 4 storm, bringing torrents of rain, high winds and high tides. More than 1 million Louisiana utility customers were without power early Monday.

The energy industry was working Monday to assess when it could restore refining operations across Louisiana and oil and gas production in the Gulf of Mexico, taken off line as a precautionary measure.

Oil prices were slightly higher Monday, but off their early peak, after jumping 10% last week. However, West Texas Intermediate futures, trading at about $69 Monday, are still down over 6.5% for the month. Nearly all Gulf of Mexico oil production was shut in, accounting for about 15% of the U.S. total.

“The reaction is mixed because we avoided the worst-case scenario,” said John Kilduff, partner with Again Capital. “But supplies are tight, and that could impact prices, especially since we are moving into the peak period for storms, and weather worries are going to persist around the market for the next several weeks. As for supply, the cupboard was kind of bare going into this.”

The shut in operations in the Gulf of Mexico should resume to normal if no damage is found. The hit to supplies from the hurricane comes as OPEC+ meets this week.

OPEC+ is widely expected to restore the 400,000 barrels a day of production it had previously committed to return to the market. The Biden administration had asked Saudi Arabia and OPEC for more supply to be restored.

But the cartel and its associates, like Russia, are expected to restore only the planned amount of oil to the market. “They’re not coming to rescue us from $70 oil,” said Kilduff.

Crude inventories are at the lowest level since January 2020. In data reported last week, crude supply fell for a third straight week while fuel demand rose to the highest level since March 2020, according to the Energy Information Administration.

Price impact for Labor Day

Gasoline supplies could also be impacted temporarily by Ida, with refineries shut down across the region. The Colonial Pipeline, a key artery transporting gasoline from Houston, across the South and up to the Northeast, was partially shut down. The pipeline expects to resume service once the system is assessed. Terminals continued to distribute gasoline.

“The consumer should not expect gasoline prices are going to go down this week,” said Andrew Lipow, president of Lipow Oil Associates. Analysts expect gasoline prices to rise 5 cents to 10 cents per gallon by the Labor Day weekend for some consumers, particularly in the southern and eastern U.S.

The average national price for unleaded gasoline was $3.15 per gallon Monday, down a penny from a week ago, according to AAA. The price is the highest for a Labor Day weekend in seven years and up sharply from the $2.23 per gallon price at this time last year.

It’s unclear when refining operations will be restored to normal, since it may be difficult to move personnel back to the impacted area.

“Pretty much everything in Baton Rouge, New Orleans area is shut down, representing 12.5% of the nation’s refining capacity,” said Lipow.

Lipow said ExxonMobil is currently shutting down its entire refining operation in Baton Rouge, responsible for 540,000 barrels a day. Two other refineries in Mississippi remain in operation, but the area is under tornado and flood watch, he said. ExxonMobil said its Baton Rouge refinery was not harmed but it is shutting down operations to stabilize them.

Kinder Morgan’s Plantation pipeline, which also takes gasoline across the southeast, was operating Monday, but its Baton Rouge terminal was without power. Lipow said Plantation transports gasoline from Louisiana refineries, while Colonial also receives oil from Texas refineries.

“No facilities, as far as we hear now, appear to have any serious physical damage, which is good news for consumers,” said Kilduff. But the industry is watching to see how soon operations will be restored and whether refineries will be impacted by power outages.

“The electrical situation is the big unknown right now,” said Kilduff. If refineries are impacted, that could mean gasoline prices would rise even more.

Gasoline demand in the U.S. was a strong 9.57 million barrels a day, the Energy Department reported in its most recent weekly data. Weekly refined product demand reached another post pandemic high and a level not seen since August 2019, according to TortoiseEcofin. The top three weekly demand readings for gasoline have been in the last several weeks, it said.

“This holiday weekend, there could be epic gasoline demand if trends hold up,” said Kilduff.

Memories of Katrina

At the same time, the shutdown of economic activity, due to Ida, has resulted in a loss of demand for oil. Tom Kloza, head of global energy research at Oil Price Information Service, said he expects the loss of Gulf of Mexico production to have little impact.

“The demand destruction from Ida is probably a little bit more significant than the lost production that will accrue from the Gulf of Mexico,” he said.

Analysts said the impact of Ida on energy prices was nothing like that of Katrina, which made landfall in Louisiana 16 years ago to the day.

“The storm may draw similarities from a geographical perspective, but the sequel has a less than similar impact on the energy markets than Katrina did,” wrote Michael Tran, commodities strategist at RBC. “In fact, historical rules of thumb have changed. Hurricanes are no longer bullish for oil prices. In fact, storms can actually have longer lasting, medium- term bearish ramifications.”

At the time, the U.S. produced just 5.2 million barrels a day, and the Gulf was responsible for 1.3 million barrels a day, compared to 1.6 million barrels a day.

“Hurricane Katrina devastated offshore oil production in the US Gulf Coast in 2005, prior to the shale revolution when offshore production comprised a much larger portion (nearly 25%) of total US output,” Tran noted.

Environment

Mercedes added to NACS ‘coming soon’ page as Tesla slows rollout

Published

8 hours ago

June 24, 2024

admin

Mercedes added to NACS 'coming soon' page as Tesla slows rollout

Tesla’s NACS support webpage now lists Mercedes along other automakers in its “coming soon” section, though the timeline for Supercharger support has been pushed back for other automakers as Tesla sorts through a chaotic reorganization of its charging team at the behest of CEO Elon Musk.

Pretty much the entire industry is onboard with NACS at this point, the new charging standard first advanced by Tesla and then certified by SAE as “J3400.”

NACS/J3400 uses the same connector that Tesla vehicles have been using for years now, and the standardization of the connector stands to make EV charging much simpler. It also has some big technical benefits that will solve a lot of the problems with EV charging.

Over the course of this year and next, virtually every manufacturer is in the process of transitioning its cars over to use the NACS standard. Most manufacturers will still use the old CCS standard as receptacles on their vehicles, but offer adapters at some point over the course of this year.

As those adapters roll out, Tesla will open up its Supercharger network to vehicles from each manufacturer, allowing them to charge on Superchargers, which are considered the gold standard EV charging network in North America.

Currently, Ford and Rivian are in the process of shipping adapters to customers, and their vehicles can use Tesla’s Supercharger network. Other EVs can also charge on Superchargers with Tesla’s “Magic Dock” adapter, though there aren’t many of those and deployment is likely to focus on NACS from here on out.

There are four other manufacturers listed as “coming soon” on Tesla’s NACS webpage. General Motors, Volvo and Polestar have been listed on there for months now, but today, Mercedes-Benz was added to the list.

However, prior to today, the “coming soon” section actually said “coming Spring 2024.” GM, Volvo and Polestar were expected to have access to Superchargers during this season. But with the season having ended four days ago, that deadline has passed.

Now, instead of listing a season, Tesla merely says “coming soon” for all upcoming manufacturers.

The delay is likely related to Musk’s recent abrupt firing of the entire supercharger team. This team, formerly led by Rebecca Tinucci – who was instrumental in negotiating the industry’s shift to NACS – was heading up discussions with other manufacturers and their adoption of the NACS standard. When the entire team was fired, that meant these discussions were delayed as other manufacturers’ contacts within Tesla were suddenly absent. (Related: Read the wild email Tesla is sending to suppliers amid Supercharger chaos)

Tesla has since started rehiring some Supercharger workers, and presumably this has allowed some progress to start being made on NACS adoption again. Ford’s adapter-shipping process has also been delayed, likely also due to Tesla’s Supercharger team chaos.

So, hopefully this means that announcements might be imminent for the companies that had been scheduled for Spring. And, with Mercedes added to the list, this means that Mercedes owners can expect Supercharging to happen “soon™” – though don’t hold your breath, because a wait of several months seems likely.

FTC: We use income earning auto affiliate links. More.

Environment

Toyota takes a page from Tesla as it opens Lexus charging stations to other EVs

Published

8 hours ago

June 24, 2024

admin

Toyota takes a page from Tesla as it opens Lexus charging stations to other EVs

Despite its slow shift to fully electric cars, Toyota may be learning. Toyota announced it’s opening Lexus charging stations to other EVs in Japan, taking a page from Tesla in the US and globally.

Lexus opens exclusive Lexus charging to all EVs

Toyota’s luxury brand opened its first “rapid charging station” in Tokyo Midtown Hibiya last June, kicking off the Lexus Electrified Program.

In December 2023, a second charging station was added at Karuiza Common Grounds. Lexus charging stations include quick chargers with up to 150 kW max power to get drivers back on the road quickly, similar to Tesla’s Supercharger network.

In comparison, Tesla’s Superchargers can deliver up to 250 kW peak charging rates. Tesla confirmed its V4 Supercharger will support up to 350 kW output, but it’s also capped at 250 kW.

Up until now, Lexus owners had exclusive access to the charging stations. Owners could reserve their spot through the My Lexus app up to 60 days in advance. Payments are handled through the App automatically for a seamless experience, similar to Tesla’s Superchargers.

However, Lexus offers benefits like complimentary drinks, workspaces, and discounts on nearby services.

Now, all EV owners will be able to access the charging stations. Toyota announced it’s opening Lexus charging stations for other EVs to use

The move is similar to Tesla, which opened its Supercharger network to other EVs. Last May, Ford was the first to announce plans to adopt Tesla’s NACS adaptor. Virtually all automakers, including Toyota and Lexus, have followed suit to gain access to Tesla’s Supercharger network in the US.

However, Tesla has over 15,000 superchargers in the US and Canada and more than 50,000 globally. By 2030, Lexus plans to have about 100 charging stations in Japan.

Meanwhile, Toyota and Lexus continue to lag behind the industry’s shift to electric vehicles. Toyota, including Lexus, sold 46,033 EVs globally through the first four months of 2024. That’s only 3.4% of Toyota’s 1.3 million cars sold during this time.

Source: Toyota, The Japan News

FTC: We use income earning auto affiliate links. More.

Environment

Tesla CTs get totaled, EV sales going great, and a call for better charging signs

Published

9 hours ago

June 24, 2024

admin

Tesla CTs get totaled, EV sales going great, and a call for better charging signs

On today’s electrifying episode of Quick Charge, we check out a number of totaled Teslas, question the legitimacy of “boat mode,” and chart the company’s declining sales. Meanwhile, NIO is hitting its sales targets, VW is doubling production of its electric van, and I want 60′ tall illuminated EV charging signs on highways.

Apps like Chargeway and Tesla’s mapping function do a phenomenal job of showing EV infrastructure to the people who need it, but that’s not how you build trust among people who aren’t yet EV drivers. Check out my rant in the Wrigley Field article, below, then let us know how you think better signage might alter the EV conversation in the comments.

Source Links

Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple Podcasts, Spotify, TuneIn, and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded Monday through Thursday (that’s the plan, anyway). We’ll be posting bonus audio content there as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news!

Got news? Let us know!
Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show!

FTC: We use income earning auto affiliate links. More.