Oil prices slip as Hurricane Laura makes Gulf Coast landfall

By Ahmad Ghaddar

LONDON (Reuters) – Oil prices fell on Thursday as a massive hurricane in the Gulf of Mexico made landfall in the heart of the U.S. oil industry, forcing oil rigs and refineries to shut down.

Brent crude futures for October, which expire on Friday, fell 50 cents, or 1.1%, to $45.14 a barrel by 1359 GMT. The more active November Brent contract was down 55 cents, or 1.2%, at $45.61 per barrel.

U.S. West Texas Intermediate crude futures fell 39 cents or 0.9% to $43 a barrel.

Hurricane Laura made landfall early on Thursday in southwestern Louisiana as a category 4 storm, one of the most powerful to hit the state, with forecasters warning it could push a wall of water 40 miles inland from the sea.

Oil producers on Tuesday had shut 1.56 million barrels per day (bpd) of crude output, or 84% of the Gulf of Mexico’s production, evacuating 310 offshore facilities.

At the same time, refiners that convert nearly 2.33 million bpd of crude oil into fuel, and account for about 12% of U.S. processing, halted operations.

“Perhaps traders are waiting to see what the damage is but the limited impact so far may also just be a reflection of the current oil market dynamics. Temporary disruptions are easily covered,” OANDA analyst Craig Erlam said.

Oil prices also shrugged off U.S. crude inventory declines and signs that gasoline demand in the world’s biggest oil consumer were improving.

Crude oil stockpiles fell last week as exports soared the most in 18 months and refineries boosted production to the highest rate since March, Energy Information Administration data showed on Wednesday. Gasoline stocks also fell.

“It appears that the gasoline inventory reduction was due first and foremost to increased demand – gasoline demand rose to a six-month high of around 9.2 million bpd,” Commerzbank said.

(Additional reporting by Sonali Paul and Koustav Samanta; editing by Jason Neely)

Death toll in Mexico gasoline pipeline blast climbs to 94: officials

Residents look at pictures of people missing after an explosion of a fuel pipeline ruptured by oil thieves, in the municipality of Tlahuelilpan, state of Hidalgo, Mexico January 21, 2019. REUTERS/Mohammed Salem

MEXICO CITY (Reuters) – The number of people who died from a gasoline pipeline explosion in central Mexico last week has risen to 94, government officials said on Tuesday, from 91 reported a day earlier.

The explosion last Friday occurred as about 800 people in Hidalgo state’s Tlahuelilpan district were collecting gasoline that was gushing from a pipeline leak near a major refinery.

Central Mexico had been hard hit by gasoline shortages after President Andres Manuel Lopez Obrador launched a crackdown on fuel theft nearly a month ago, ordering pipelines closed in an effort to stamp out criminal activity.

(Reporting by Dave Graham and Daina Beth Solomon; Editing by Bernadette Baum)

Indonesian quake survivors scavenging in ‘zombie town’; president ramps up aid

Policemen walk at the ruins of a church after an earthquake hit Jono Oge village in Sigi, Indonesia's Sulawesi island, October 3, 2018. REUTERS/Beawiharta

By Kanupriya Kapoor and Fathin Ungku

PALU, Indonesia (Reuters) – Hungry survivors of an earthquake and tsunami in Indonesia said on Wednesday they were scavenging for food in farms as President Joko Widodo made a second visit to the area to ramp up aid efforts five days after disaster struck.

The official death toll from the 7.5 magnitude quake that hit the west coast of Sulawesi island last Friday rose to 1,407, many killed by tsunami waves it triggered.

A ship is seen stranded on the shore after the earthquake and tsunami hit an area in Wani, Donggala, Central Sulawesi, Indonesia October 3, 2018. REUTERS/Athit Perawongmetha

A ship is seen stranded on the shore after the earthquake and tsunami hit an area in Wani, Donggala, Central Sulawesi, Indonesia October 3, 2018. REUTERS/Athit Perawongmetha

But officials fear the toll could soar, as most of the confirmed dead have come from Palu, a small city 1,500 km (930 miles) northeast of Jakarta, and losses in remote areas remain unknown, as communications are down, and bridges and roads have been destroyed or blocked by landslides.

National disaster mitigation agency spokesman Sutopo Purwo Nugroho said most of the aid effort had been concentrated in Palu, where electricity supply has yet to be restored.

But rescue workers have begun to reach more remote areas in a disaster zone that encompasses 1.4 million people.

Johnny Lim, a restaurant owner reached by telephone in Donggala town, said he was surviving on coconuts.

“It’s a zombie town. Everything’s destroyed. Nothing’s left,” Lim said over a crackling line.

“We’re on our last legs. There’s no food, no water.”

Debris and damaged property are seen following an earthquake in Petobo, Central Sulawesi, Indonesia, October 3, 2018, in this still image obtained from a social media video. Palang Merah Indonesia (Red Cross)/via REUTERS.

Debris and damaged property are seen following an earthquake in Petobo, Central Sulawesi, Indonesia, October 3, 2018, in this still image obtained from a social media video. Palang Merah Indonesia (Red Cross)/via REUTERS.

In another part of Donggala district, which has a population of 300,000 people, Ahmad Derajat, said survivors were scavenging for food in fields and orchards.

“What we’re relying on right now is food from farms and sharing whatever we find like sweet potatoes or bananas,” said Derajat whose house was swept away by the tsunami leaving a jumble of furniture, collapsed tin roofs and wooden beams.

“Why aren’t they dropping aid by helicopter?” he asked.

Aid worker Lian Gogali described a perilous situation in Donggala, which includes a string of cut-off, small towns along a coast road north of Palu close to the quake’s epicenter.

“Everyone is desperate for food and water. There’s no food, water, or gasoline. The government is missing,” Gogali said, adding that her aid group had only been able to send in a trickle of rations by motorbike.

Underlining a growing sense of urgency, President Widodo made his second visit to the disaster zone, putting on an orange hard hat to talk to rescue workers at a collapsed hotel in Palu.

“What I’ve observed after returning now is heavy equipment has arrived, logistics have started to arrive although it’s not at maximum yet, fuel has partly arrived,” Widodo told reporters.

A mother and her son, both injured by the earthquake and tsunami, wait to be airlifted out by a military plane at Mutiara Sis Al Jufri Airport in Palu, Central Sulawesi, Indonesia, October 3, 2018. REUTERS/Athit Perawongmetha

A mother and her son, both injured by the earthquake and tsunami, wait to be airlifted out by a military plane at Mutiara Sis Al Jufri Airport in Palu, Central Sulawesi, Indonesia, October 3, 2018. REUTERS/Athit Perawongmetha

‘PRESIDENT NOT HEARING’

Widodo, who will seek re-election next year, called on Tuesday for reinforcements in the search for victims, saying everyone had to be found. He repeated that on Wednesday, after inspecting what he called an “evacuation” effort at the Hotel Roa Roa, where he said some 30 people lay buried in the ruins.

Yahdi Basma, a leader from a village south of Palu hoping to get his family on a cargo plane out, said Widodo had no idea of the extent of the suffering.

“The president is not hearing about the remote areas, only about the tsunami and about Palu,” he said.

“There are hundreds of people still buried under the mud in my village … There is no aid whatsoever which is why we’re leaving.”

At least seven cargo planes arrived at Palu airport earlier on Wednesday carrying tonnes of aid, some bedecked in the red and white national colors and stamped with the presidential office seal declaring: “Assistance from the President of Republic of Indonesia”.

The quake brought down hotels, shopping malls and thousands of houses in Palu, while tsunami waves as high as six meters (20 feet) scoured its beachfront shortly afterward.

About 1,700 houses in one neighborhood were swallowed up by ground liquefaction, which happens when soil shaken by an earthquake behaves like a liquid, and hundreds of people are believed to have perished, the disaster agency said.

Indonesian Red Cross disaster responders said the village of Petobo, just south of Palu, which was home to almost 500 people, had been “wiped off the map”.

“They are finding devastation and tragedy everywhere,” Iris van Deinse, of International Federation of Red Cross and Red Crescent Societies, said in a statement.

Nearby, rescue workers, some using an excavator, were searching for 52 children missing since liquefaction destroyed their bible study camp. Bodies of 35 of the children have been found.

Aircraft, tents, water treatment facilities and generators were the main needs for survivors including more than 70,000 displaced people, according to the national disaster mitigation agency spokesman.

Sitting on the seismically active Pacific Ring of Fire, Indonesia is one of the world’s most vulnerable countries to quakes and tsunamis. A quake in 2004 triggered a tsunami across the Indian Ocean that killed 226,000 people in 13 countries, including more than 120,000 in Indonesia.

Adding to Sulawesi’s woes, the Soputan volcano in the north of the island, 600 km (375 miles) northeast of Palu, erupted on Wednesday but there were no reports of casualties or damage.

(Additional reporting by Agustinus Beo Da Costa, Maikel Jefriando, Tabita Diela, Gayatri Suroyo, Fransiska Nangoy, Fanny Potkin, Ed Davies and Fergus Jensen in JAKARTA, Stephanie Ulmer-Nebehay in GENEVA and Matt Spetalnick in WASHINGTON; Writing by Robert Birsel; Editing by Simon Cameron-Moore)

Approaching hurricane sparks runs in Hawaii on plywood, water and gasoline

Paul Akamine fills propane tanks for customers as Hurricane Lane approaches Honolulu, Hawaii, U.S. August 22, 2018. REUTERS/Hugh Gentry

By Sue Horton

HANALEI, Hawaii (Reuters) – Micco Godinez, who rents out kayaks on the island of Kauai and loves surfing, said he was twice tempted to hit the waves on Wednesday but kept his focus on a more pressing concern – getting ready to board up his home for a major hurricane.

With forecasts calling for Hurricane Lane to strike or brush past Hawaii’s “Garden Isle” on Friday, Godinez, 66, has joined tens of thousands of others on Kauai, and across the state, in the rituals of disaster preparation.

A long line of cars wait as people fill up their vehicles with gasoline as Hurricane Lane approaches Kauai, Hawaii, U.S., August 22, 2018. REUTERS/ Sue Horton

A long line of cars wait as people fill up their vehicles with gasoline as Hurricane Lane approaches Kauai, Hawaii, U.S., August 22, 2018. REUTERS/ Sue Horton

Lane, wavering between Category 4 and Category 5 strength on the five-step Saffir-Simpson hurricane scale, churned toward the U.S. Pacific island state with sustained winds of up to 155 miles per hour (250 kph) on Wednesday, as authorities urged residents to stock up on water, food and medicines.

Across Hawaii, jittery residents lined up at hardware centers, gasoline stations and grocery stores. But nowhere was the sense of urgency perhaps more palpable than on Kauai, where torrential rains four months ago triggered widespread flooding that destroyed homes and washed out roads.

“Some people here were just wiped out in that flood. It rained 50 inches (127 cm) in 24 hours,” said Hanalei resident Charlie Cowden, who owns several surf shops on the island. “Now there is this.”

Many older residents recalled even greater devastation from the last Category 4 storm to pummel Hawaii, Hurricane Iniki, which made landfall on Kauai in September 1992, killing six people and leveling or damaging more than 14,000 dwellings.

Luke Yamanuha loads plywood into his truck as Hurricane Lane approaches Honolulu, Hawaii, U.S. August 22, 2018. REUTERS/Hugh Gentry

Luke Yamanuha loads plywood into his truck as Hurricane Lane approaches Honolulu, Hawaii, U.S. August 22, 2018. REUTERS/Hugh Gentry

‘SLIM PICKINGS’

Godinez, who lives two blocks from the ocean in the bayside town of Hanalei on Kauai’s north shore, said he spent part of his day shopping for lumber and a recharging device for his portable drill.

He described the mood in town as “pleasantly apprehensive” and said he even felt the familiar pang of one of his favorite pastimes. “Twice the surf was up, and twice I wanted to go surfing, but I had other things pressing on my mind.”

He recalled getting up early to drive to a Home Depot building-supply outlet before it opened at 6 a.m., only to find two dozen others already lined up ahead of him.

“There’s a run on plywood,” he said. “It was slim pickings when I was there.”

Pausing later after filling up jugs of water, Godinez said he and his wife would spend the rest of the day taking measurements and cutting plywood to fit over more than 18 windows on their two-story house.

“Measure twice, cut once, and away we go,” he said, adding they would wait until Thursday for the latest forecasts before deciding whether to go ahead with fastening the boards to the windows.

Since Hanalei is on the opposite side of Kauai from where the hurricane is most likely to come ashore, Godinez said he was less concerned about ocean storm surge than ferocious winds.

Godinez said he, his wife and two guests planned to “hunker down” in a first-floor laundry room at the height of the storm, should it make landfall by late Thursday or early on Friday.

With two small laundry windows sealed up and probably no electricity, except for battery-powered flashlights, “It’s going to be hot and dark,” he said.

(Reporting by Sue Horton; Additional reporting and writing by Steve Gorman in Los Angeles; Editing by Bill Tarrant and Peter Cooney)

U.S. crude oil output hits 11 million barrels per day for first time ever

FILE PHOTO: A pump jack is seen at sunset near Midland, Texas, U.S., on May 3, 2017. Picture taken May 3, 2017. REUTERS/Ernest Scheyder/File Photo

By David Gaffen

(Reuters) – U.S. crude oil production last week hit 11 million barrels per day (bpd) for the first time in the nation’s history, the Energy Department said on Wednesday, as the ongoing boom in shale production continues to drive output.

The gains represent a rapid increase in output, as the data if confirmed by monthly figures, puts the United States just behind Russia as the world’s largest producer of crude oil. The nation has added nearly 1 million bpd in production since November, thanks to rapid increases in shale drilling.

“I don’t think production is plateauing at 11. It’s fully expected to grow beyond 11 – we won’t be topping out there,” said Scott Shelton, a broker at ICAP in Durham, North Carolina.

Crude inventories increased 5.8 million barrels in the week to July 13, compared with analysts’ expectations for a decrease of 3.6 million barrels.

Crude futures edged down on the data. U.S. crude was down 55 cents to $67.51 a barrel, while Brent dropped 39 cents to $71.77 a barrel. The benchmarks have gained steadily since bottoming out below $30 a barrel in early 2016; U.S. crude is up nearly 12 percent this year.

Weekly production figures from the U.S. Energy Information Administration are notorious for revisions, however, as monthly data, released on a lag, shows U.S. production at 10.5 million bpd as of April.

In the last several weeks, the EIA has rounded off U.S. production to the nearest hundred thousand barrels, so that figure had been stuck at 10.9 million bpd for more than a month.

Russia’s oil production rose to 11.2 million bpd as of early July, sources familiar told Reuters.

Even as the United States has swiftly ramped up output in the last two years, the country still depends heavily on imports, as it remains the world’s largest oil consumer, with consumption of nearly 20 million bpd.

Net U.S. crude imports rose last week by 2.2 million bpd to about 9 million bpd.

Gasoline stocks fell by 3.2 million barrels, compared with analysts’ expectations in a Reuters poll for a drop of 44,000 barrels.

Distillate stockpiles, which include diesel and heating oil, fell by 371,000 barrels, versus expectations for an 873,000-barrel increase, the EIA data showed.

(Reporting By David Gaffen; additional reporting by Ayenat Mersie; Editing by Marguerita Choy)

North Korea likely to pursue talks, South says in rosy New Year forecast

South Korean soldiers patrol along a barbed-wire fence near the militarized zone separating the two Koreas, in Paju, South Korea, December 21, 2017

By Haejin Choi

SEOUL (Reuters) – South Korea predicted on Tuesday that North Korea would look to open negotiations with the United States next year in an optimistic outlook for 2018, even as Seoul set up a specialized military team to confront nuclear threats from the North.

The U.N. Security Council unanimously imposed new, tougher sanctions on reclusive North Korea on Friday for its recent intercontinental ballistic missile test, a move the North branded an economic blockade and act of war.

“North Korea will seek negotiation with United States, while continuing to pursue its effort to be recognized as a de facto nuclear-possessing country,” South Korea’s Unification Ministry said in a report, without offering any reasons for its conclusion.

The Ministry of Defence said it would assign four units to operate under a new official overseeing North Korea policy, aimed to “deter and respond to North Korea’s nuclear and missile threat”.

Tensions have risen over North Korea’s nuclear and missile programs, which it pursues in defiance of years of U.N. Security Council resolutions, with bellicose rhetoric coming from both Pyongyang and the White House.

U.S. diplomats have made clear they are seeking a diplomatic solution but President Donald Trump has derided talks as useless and said Pyongyang must commit to giving up its nuclear weapons before any talks can begin.

In a statement carried by the official KCNA news agency, North Korea said the United States was terrified by its nuclear force and was getting “more and more frenzied in the moves to impose the harshest-ever sanctions and pressure on our country”.

China, the North’s lone major ally, and Russia both supported the latest U.N. sanctions, which seek to limit the North’s access to refined petroleum products and crude oil and its earnings from workers abroad, while on Monday Chinese Foreign Ministry spokeswoman Hua Chunying called for all countries to ease tension.

On Tuesday, Beijing released customs data indicating China exported no oil products to North Korea in November, apparently going over and beyond U.N. sanctions.

China, the main source of North Korea’s fuel, did not export any gasoline, jet fuel, diesel or fuel oil to its neighbor last month, data from the General Administration of Customs showed.

China also imported no iron ore, coal or lead from North Korea in November.

In its 2018 forecast, South Korea’s Unification Ministry said it believed the North would eventually find ways to blunt the effects of the sanctions.

“Countermeasures will be orchestrated to deal with the effects, including cuts in trade volume and foreign currency inflow, lack of supplies, and reduced production in each part of the economy,” the report said.

The latest round of sanctions was prompted by the Nov. 29 test of what North Korea said was an intercontinental ballistic missile that put the U.S. mainland within range of its nuclear weapons.

The Joongang Ilbo Daily newspaper, citing an unnamed South Korean government official, reported on Tuesday that North Korea could also be preparing to launch a satellite into space.

Experts have said such launches are likely aimed at further developing the North’s ballistic missile technology, and as such would be prohibited under U.N. resolutions.

The North Korean Rodong Sinmun newspaper said on Monday saying that “peaceful space development is a legitimate right of a sovereign state”.

North Korea regularly threatens to destroy South Korea, the United States and Japan, and says its weapons are necessary to counter U.S. aggression.

The United States stations 28,500 troops in the South, a legacy of the 1950-53 Korean War, and regularly carries out military exercises with the South, which the North sees as preparations for invasion.

(Additional reporting by Muyu Xu and Ryan Woo in Beijing; Writing by Josh Smith; Editing by Nick Macfie)

With fuel and water scarce, Puerto Rico presses for shipping waiver

FILE PHOTO: People queue to fill container with gasoline in a gas station after the area was hit by Hurricane Maria in Toa Baja, Puerto Rico September 24, 2017. REUTERS/Carlos Garcia Rawlins/File Photo

By Robin Respaut and Scott DiSavino

SAN JUAN, Puerto Rico/NEW YORK (Reuters) – As Puerto Rico struggles with a lack of fuel, water and medical supplies following the devastation of Hurricane Maria, it is pressing the Trump administration to lift a prohibition on foreign ships delivering supplies from the U.S. mainland.

The island’s governor is pushing for the federal government to temporarily waive the Jones Act, a law requiring that all goods shipped between U.S. ports be carried by U.S. owned-and-operated ships. President Donald Trump’s administration has so far not granted his request.

“We’re thinking about that,” Trump told reporters when asked about lifting the Jones Act restrictions on Wednesday. “But we have a lot of shippers and …. a lot of people that work in the shipping industry that don’t want the Jones Act lifted, and we have a lot of ships out there right now.”

Many of the U.S. territory’s 3.4 million inhabitants are queuing for scarce supplies of gas and diesel to run generators as the island’s electrical grid remains crippled a week after Maria hit. Government-supplied water trucks have been mobbed.

Puerto Rico gets most of its fuel by ship from the United States, but one of its two main ports is closed and the other is operating only during the daytime.

“We expect them to waive it (the Jones Act),” Governor Ricardo Rossello told CNN on Wednesday, noting there was a brief waiver issued after Hurricane Irma, which was much less devastating as it grazed past the island en route for Florida earlier this month.

Members of Congress from both parties have supported an emergency waiver, he said.

The U.S. government has issued periodic Jones Act waivers following severe storms in the past, to allow the use of cheaper or more readily available foreign-flagged ships.

The U.S. Department of Homeland Security, which waived the law after Irma and after Hurricane Harvey hit Texas in August, said on Wednesday it was considering a request by members of Congress for a waiver, but had not received any formal requests from shippers or other branches of the federal government.

Gregory Moore, a spokesman for Customs and Border Protection, an office of Homeland Security, said in a statement on Tuesday that an agency assessment showed there was “sufficient capacity” of U.S.-flagged vessels to move commodities to Puerto Rico.

“The limitation is going to be port capacity to offload and transit, not vessel availability,” he said.

LACK OF WATER, FUEL

Maria, the most powerful storm to hit Puerto Rico in nearly 90 years, caused widespread flooding and damage to homes and infrastructure.

Residents are scrambling to find clean water, with experts concerned about a looming public health crisis posed by the damaged water system.

On Tuesday, hundreds of people crowded around a government water tanker in the northeastern municipality of Canovanas with containers of every size and shape after a wait that for many had lasted days.

Some residents also waited hours for gasoline and diesel to fuel their automobile tanks and power generators to light their homes.

U.S. Air Force Colonel Michael Valle, on hand for relief efforts in San Juan, said he was most concerned about “the level of desperation” that could arise if fuel distribution did not return to normal within a couple of weeks.

In Washington, Republican leaders who control both chambers of Congress have said they are prepared to boost disaster funding, but are waiting for a detailed request from the Trump administration.

In the meantime, the administration still has $5 billion in aid in a disaster relief fund, and Congress has also approved about $7 billion more that will become available on Oct. 1.

(Reporting by Robin Respaut in San Juan, Puerto Rico and Scott DiSavino in New York; Additional reporting by Doina Chiacu, Richard Cowan, Timothy Gardner and Jeff Mason in Washington; Writing by Bill Rigby; Editing by Frances Kerry and Lisa Shumaker)

For desperate Puerto Ricans, fuel a precious commodity

FILE PHOTO: People line up to buy gasoline at a gas station after the area was hit by Hurricane Maria, in San Juan, Puerto Rico September 22, 2017. Picture taken September 22, 2017. REUTERS/Alvin Baez/File Photo

By Robin Respaut, Dave Graham and Jessica Resnick-Ault

SAN JUAN, PUERTO RICO/NEW YORK (Reuters) – Puerto Rico resident Marangelly Garcia waited eight hours for diesel to fuel her family’s generator on Monday, but the supply ran out before she got to the front of the line.

The beauty products distributor tried again Tuesday, waking up at 4 a.m. But the line in her municipality of Guaynabo, near San Juan, was still formidable.

Her latest strategy to get a place in line: “I’m going to be camping tonight.”

With Puerto Rico’s electric grid in shambles after Hurricane Maria, gasoline and diesel have become liquid gold in this U.S. territory. The island’s 3.4 million residents urgently need it to fuel their automobile tanks and power generators to light their homes and businesses.

But like so many other necessities here, the distribution of fuel is reliant on a transportation network crippled by the storm.

Puerto Rico gets most of its fuel sent by ship from the United States. But restrictions at its ports, with one closed and another operating only during the daytime, has limited shipping. Meanwhile, tanker trucks have had difficulty navigating the island’s blocked and damaged roads.

U.S. Air Force Colonel Michael Valle, on hand for relief efforts in San Juan, said he was most concerned about “the level of desperation” that could arise if fuel distribution did not return to normal within a couple of weeks.

Complicating those efforts is the shutdown of Puerto Rico’s primary fuel storage point. Known as the Yabucoa terminal, the facility is located in the hard-hit southeastern part of the island, where Maria first made landfall. The terminal was closed prior to the storm and has yet to re-open, according to Buckeye Partners, the terminal operator, which said a full assessment of the facility is under way.

Yabucoa can store up to 4.6 million barrels of crude oil, gasoline or products like fuel oil and diesel needed for power generation. That storage point is used for distribution for other islands in the Caribbean as well.

Adding to Puerto Rico’s difficulties is the sudden surge in demand for diesel to power generators. A shipping broker who was not authorized to speak to the press said concerns about diesel supplies were growing.

The few gas stations operating in Puerto Rico have attracted miles-long lines of cars, where drivers wait seven hours or longer in queues that snake through neighborhoods, up highway exit ramps and onto freeways.

“People here are going crazy trying to find gas,” said motorist Peter Matos, 60, of Yauco, a city in the southwestern part of the island. “I have about half a tank left.”

Puerto Rico Governor Ricardo Rossello told mayors he will work with U.S. authorities to improve fuel distribution, said Israel Morales, a communications advisor to municipalities in Puerto Rico.

The day after the storm hit, Rossello advised mayors that there was sufficient fuel, Morales said, but the problem was distribution as it was stored at the ports and terminals on the island, and could not be easily routed to areas that needed it.

The island’s residents use about 155,000 barrels of fuel a day, less than 1 percent of the 19 million barrels consumed daily in the United States. Puerto Rico has no operating refineries, as the last one idled in 2009.

The good news is that the Port of San Juan, the island’s primary port, has experienced minimal damage, according to Jose Luis Ayala, chairman and director general of Puerto Rico’s division of shipping company Crowley Maritime Corp.

He said ships carrying fuel were moved south out of Hurricane Maria’s path, and were able to get to the Port of San Juan once the terminal re-opened on Friday.

“Even though there was some damage, it was functional,” he said. According to Thomson Reuters shipping data, three vessels were unloading fuel at San Juan as of Tuesday, while three others were waiting for opportunities to unload as well.

Large convoys of fuel trucks were seen traveling the highways on Monday, the first time in several days those vehicles were out in force. Hospitals and fuel stations are taking deliveries of diesel via trucks escorted by armed guards.

As of Monday, 91 trucks were supplying fuel and 108 filling stations were being guarded by the U.S. National Guard, according to a Tuesday statement from the island’s Secretary of Public Affairs, Ramon Rosario Cortes.

(Reporting By Robin Respaut and David Graham in San Juan, and Jessica Resnick Ault in New York; Additional reporting by Ricardo Ortiz in San Juan and Marianna Parraga in Houston; Writing by David Gaffen; Editing by Marla Dickerson)

Irma knocks out power to nearly 6 million: authorities

A lifeguard hut is pictured as Hurricane Irma arrives in Hollywood, Florida. REUTERS/Carlo Allegri

By Scott DiSavino

(Reuters) – Hurricane Irma knocked out power to about 5.8 million homes and businesses in Florida, even as the storm weakened as it crept up the state’s west coast, according to state officials and local electric utilities.

Irma hit Florida on Sunday morning as a dangerous Category 4 hurricane, the second-highest level on the five-step Saffir-Simpson scale. It gradually lost strength and weakened to a tropical storm by Monday morning as it headed toward Georgia, the U.S. National Hurricane Center said at 8 a.m. EDT (1200 GMT)..

Maximum sustained winds were at 70 miles (110 km) per hour, the forecaster said.

Power losses in Georgia, which were at about 152,000 as of 8:45 a.m. EDT, were expected to increase as the storm moved north.

In Florida, the state’s biggest electric company said its outages came to more than 3.6 million by 8:30 a.m. on Monday. A total of 4.2 million Florida Power & Light customers have been affected, with about 570,000 getting service restored, mostly by automated devices.

Full restoration of power could take weeks in many areas due to expected damage to FPL’s system, the NextEra Energy Inc unit said.

As the storm pushed north, outage figures were increasing at other large utilities, including units of Duke Energy Corp, Southern Co and Emera Inc.

Duke’s outages jumped to more than 860,000 overnight; the company said they could ultimately exceed 1 million. Emera’s Tampa Electric utility reported 300,000 homes and businesses lost power by Monday morning.

FPL said its two nuclear plants were safe. Both units at its Turkey Point facility, located about 30 miles (48 km) south of Miami, were shut by early Monday.

The company closed Turkey Point’s Unit 3 on Saturday as Irma approached the coast but decided not shut Unit 4 at that time because the hurricane track shifted away from the plant toward the western part of the Florida Peninsula. FPL, however, shut Unit 4 on Sunday night due to a possible valve issue that was probably not related to Irma, U.S. Nuclear Regulatory Commission officials said on Monday.

At its St Lucie nuclear plant located about 120 miles (190 km) north of Miami, FPL started to reduce power at Unit 1 due to salt buildup from Irma in the switchyard, NRC spokesman Roger Hannah said. The plant’s other reactor, Unit 2, continued to operate at full power.

Duke’s retired Crystal River plant, about 90 miles (145 km) north of Tampa, has spent nuclear fuel, but Hannah said that was not a problem.

As the storm loomed and came ashore, gasoline stations struggled to keep up as people evacuated Florida. In the Atlanta metropolitan area, about 13.2 percent of stations were out of the fuel, according to information service Gas Buddy.

Irma is expected to sap demand for fuel for a time, Goldman Sachs analysts said in a note on Monday, but they cautioned that supply could remain strained due to refining capacity offline in the wake of Hurricane Harvey, which hit Texas two weeks ago.

 

(Reporting by Scott DiSavino and Jessica Resnick-Ault in New York; Additional reporting by Ruthy Munoz in Houston; Editing by Frances Kerry and Lisa Von Ahn)

 

Retail U.S. gasoline prices surge as refineries warn of shortages after Harvey

A note is left on a gas pump in the aftermath of Hurricane Harvey in Cedar Park, Texas, U.S., September 1, 2017. REUTERS/Mohammad Khursheed

By Julia Simon

NEW YORK (Reuters) – Retail U.S. gasoline prices rose 2.8 percent from Friday to Saturday as refineries warned customers about fuel-supply shortages caused by Hurricane Harvey.

They were at $2.59 a gallon, according to motorists advocacy group AAA. It represents a 16.7 percent rise in the average price from a year ago.

Prices have risen more than 17.5 cents since Aug. 23, before the storm began.

Average prices in Texas, the epicenter of the storm, rose more than 3 percent from Friday to Saturday, and are up 12 percent from a week ago.

Refiner Motiva has warned customers along the route of the largest U.S. fuel pipeline to prepare for shortages after Harvey shut refineries and cut supply to the line, said a source at a fuel distributor supplied by Motiva.

Harvey shut refineries that can process up to 4.4 million barrels per day (bpd) of crude. The plants shut down include Motiva’s 603,000 bpd facility in Port Arthur, Texas, the largest refinery in the country.

Nearly half of the U.S. refining capacity is in the Gulf Coast, a region with proximity to plentiful crude supplies including Texan oil fields and also Mexican and Venezuelan oil imports.

“The refineries were built on the Gulf Coast with the idea that we’re going to import,” said Sandy Fielden, director of oil and products research at Morningstar in Austin, Texas, “That’s why we’re having problems today because that’s where they were all built.”

The reduction in fuel supplies has forced the Colonial Pipeline, which supplies fuel from refineries near the Gulf of Mexico to the U.S. Northeast, to reduce supplies.

Convenience store and gas station chain Circle K, a big buyer from Motiva, said the company was working with a limited supply.

Some crude oil pipelines have restarted operations. Magellan Midstream Partners <MMP.N> announced late Friday that it resumed operations on its BridgeTex and Longhorn crude oil pipelines. The two pipelines transport around 675,000 barrels per day (bpd) of West Texas crude oil into East Houston.

The company says it expects to resume service on its Houston crude oil distribution system over the weekend.

U.S. crude production continues to stall following the storm. As of Friday, volume of crude production still shut-in had declined to about 153,000 bpd, down from 324,000 bpd just two days ago.

(Reporting by Julia Simon Editing by Jeremy Gaunt)