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Hurricanes create more problems for petroleum industry Alex Mills column

Just when the petroleum industry thought things were really bad (oversupply of crude oil and natural gas, bad global economy, a worldwide pandemic, and record price decline), two hurricanes blow through the Gulf of Mexico causing major disruptions to offshore production and refining.

An estimated 1 million barrels per day of oil production has been shut-in and several major refineries have been evacuated as Hurricane Laura hit the Texas-Louisiana Gulf coast Thursday.

Alex Mills, Texas Alliance of Energy Producers president

Demand for all forms of energy has declined since the beginning of the year because of the COVID-19 pandemic, but transportation fuels – gasoline, jet fuel and diesel – have been hit especially hard.

Demand for jet fuel declined 50 percent, gasoline 25 percent and diesel 10 percent, according to the Energy Information Administration (EIA).  

Stay-at-home orders and travel restrictions affected gasoline and jet fuel demand more than diesel fuel demand. The decline in gasoline and jet fuel consumption was the result of consumers travelling less.

Read More: Hurricanes create more problems for petroleum industry Alex Mills column

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