Threat of Hurricane Irene Increases Oil Prices

Brian Hicks

Written By Brian Hicks

Posted August 25, 2011

Oil prices increase, energy providers brace themselves for an extra workload, and refineries consider closing up shop as the East Coast prepares for Hurricane Irene.

Irene is a category three hurricane capable of producing winds up to 120mph.

Energy providers are utilizing their entire response team and providing safety tips to the public.

Duke Energy (NYSE:DUK),  located in North Carolina, wants to place trucks at an EMS office so they can respond fast if the storm rolls through hard.  Like most utility companies, Duke is increasing their staff.

PECO Energy in Philadelphia, PA is placing crews on standby and has their sister company, Chicago-based ComEd, ready to come help if needed.Hurricane oil platform

Dominion Resources Inc (NYS: D), an energy provider in Virginia and Eastern North Carolina, is asking their customers to take necessary measures to keep themselves safe. The company says they are ready to handle whatever situations come their way.

Constellation Energy Nuclear Group (NYSE: CEG ) based right here in Baltimore is preparing for the possible impact of Irene on Maryland.

Teams are standing by to ensure those affected by the storm will be helped. Emergency safety procedures are in effect, and back-up systems are placed at the facilities so they can safely operate.

The U.S. East Coast has 10 operating refineries with a capacity of 1.21 million barrels a day, according to Energy Department data. The area accounts for 7.1 percent of total U.S. operating capacity.

 Oil refineries prepare to have Irene shut them down, and some refineries are thinking of closing on their own.

“We will probably end up shutting down the six refineries in the New Jersey Philly area,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

The demand for oil this past week went up as well as the cost for it. The increase in price is to account for possible loss of oil and damage to the facilities.

Heating oil for September delivery increase 1.82 cents or six percent.

Supplies of heating oil and diesel rose 1.73 million barrels to 155.7 million, the highest level since February.

 Although the demand for gasoline has fallen 2 percent to 9.01 million barrels a day Regular gasoline at the pump, averaged nationwide, rose 0.3 percent to $3.575 a gallon yesterday, according to AAA data.

 Energy providers, oil refineries, and those who live on the East Coast are all just hoping that Irene will take another path so damage isn’t caused and so gas prices won’t get any higher.

Until next time,


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