Oil production slashed by over 90% in Gulf region following Hurricane Ida

Oil production slashed by over 90% in Gulf region following Hurricane Ida

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00:00
according to the latest data from the bureau of safety and environmental enforcement oil production in the gulf of mexico has been slashed by nearly 90 95 and natural gas production down 94 let's bring in tom closer from oil price information service tom good to see you as always um are you surprised that we haven't seen a bigger reaction in prices upwards given some of those statistics i just mentioned no i'm not wilfred because a lot of things have happened in the last 16
00:31
years or so to make sure that that production gets returned much more quickly first of all gulf of mexico production used to be about 25 or so of u.s output now it's maybe 15 percent so a lot of it has been tilted towards jail secondarily a lot of the equipment has been put into the infrastructure there so that it can be restarted very quickly i'm a little surprised that refined products and particularly gasoline or our bob hasn't moved higher but we've
01:01
got plenty of time for that this is going to be measured in weeks in terms of restoring refineries it'll be measured in days in terms of restoring offshore oil production a good point there with the refineries and i'm wondering if you're a consumer if you're looking at prices at the pump and how that may have a triple impact down on your business i know uh walmart pays close attention to gas prices what do you expect if it takes weeks for refineries to get back online are we looking at a big gasoline spike in just the southeast say or throughout the
01:32
country well i think the southeast was exempt from the three dollar plus prices other parts of the country most notably the west and the rocky mountain saw and they may gravitate toward that three dollar number but i don't expect the super spike or anything like that i think it'll be more of a wobble higher and it may take place this week because this week after all is a big week in terms of demand and consumption it drops about five or six percent in ordinary
02:02
years after that and the recipe for gasoline may change any moment if the epa decides to say summer's over and you can use the winter recipe for gasoline that'll help a little bit but i think this will be an unusual year and it won't see those sort of crashes that we've seen in previous autumns the components that are part of the recipe for gasoline in the autumn and winter aren't as cheap uh i don't cover petrochemicals per se but petrochemicals and all of the different
02:34
molecules that support those are very very tight throughout the country anybody that's had to buy resin uh for a surfboard or for a pool or for a boat go about that um once we move past uh ida hopefully fairly soon tom what what is your outlook for wti throughout the rest of this year well i'm not a believer in the super cycle you know i believe in super bad and super free super cycles so i think that we're probably going to have episodes above 70
03:06
dollars for wti and it should ostensibly tighten this actually hurts the bull case for wti because it removes you know 2 million barrels a day of demand for crude in the united states momentarily and it may persist to where october and november we don't use as much so i don't think we'll get to those astronomical levels and and by the way you're going to hear this a lot this year that it's the highest labor day or most expensive labor day since 2014.
03:37
2014 was the end of a four-year stretch where labor day gas was 3.45 to 3.85 so we're not quite there yet tom thanks for joining us good to see you as always

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