Hurricane Delta shuts most U.S. offshore oil output in 15 years

HOUSTON (Reuters) - A large and powerful hurricane delta dealt US offshore production in the Gulf of Mexico the biggest blow in 15 years, halting most of the oil in the region and nearly two-thirds of natural gas production.
Delta packed 195 km of wind on Friday as it swirled through the Gulf's most important oil producing area towards the Louisiana coast landing. It was about 160 miles south of Cameron, Louisiana, according to a 7 o'clock CDT update from the U.S. National Hurricane Center.
Delta has closed 1.67 million barrels a day, or 92% of the Gulf’s oil production, the most since 2005 when Hurricane Katrina destroyed more than 100 offshore platforms for months and hampered production.
Oil prices slumped in London trading on Friday, but rose about 10% for the week, fueled by outages in the Gulf of Mexico and a labor dispute in the North Sea. The two together withdrew 2 million barrels a day from the market.
U.S. natural gas prices on Friday were on track to hit their highest level since November 2019 for shutdowns. The previous month's gas futures were up 11 cents, or 4.3%, to $ 2.74 per million British thermal units.
The workers had evacuated 279 offshore rigs in the Gulf of Mexico and the manufacturers relocated 15 drilling rigs away from the large and strong wind field of Delta. Tropical winds extended up to 160 miles from its center, a sign of its size, according to the NHC.
Delta's strength will decrease as it approaches the coast, however, it is expected to remain on the 5-notch Saffir-Simpson scale during or near a Category 3 storm. It will bring a storm surge of 1.2 to 3.3 meters to the coast near the landing, the NHC said.
In addition to oil, producers have stopped nearly 62% of the region's natural gas production, or 1.675 billion cubic feet per day. Offshore fields in the Gulf of Mexico produce approximately 15% of US crude oil and 5% of its natural gas production.
Total SA began shutting down an oil processing facility at the Port Arthur, Texas refinery with a capacity of 225,500 barrels per day (bpd) on Thursday due to the threat posed by the Hurricane Delta.
Royal Dutch Shell Plc said it will continue to operate its refineries in Convent, Geismar and Norco, Louisiana, during the storm.

(Reporting by Gary McWilliams; Editing by Ana Nicolaci da Costa and Chizu Nomiyama)

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