What happened: WTI oil prices have bounced around the past several days as the market attempts to digest both the gulf shut-ins and the war in the Middle East.  All 5 gulf coast states are expected to be affected by the storm and spot oil prices have been as low as $85 and over $96 the past several days.  Hurricane Isaias is expected to make landfall Friday evening.

The big picture: It is unlikely Midland will see any direct effects from the hurricane.  The local oil industry could be impacted, most notably with temporarily higher prices.  According to the Bureau of Safety and Environmental Enforcement (the regulatory body of oil and gas in the Gulf of America), approximately 63% or 1,300,000 barrels of oil per day of offshore production have been shut in and a third of the manned platforms have been evacuated.

What’s next: Oil prices are unlikely to be affected long term by this storm.  Midlanders could see higher gasoline and diesel prices as the refineries in Alabama and Mississippi could be impacted.  But there is only about 600,000 barrels of capacity in those states out of 17,000,000 barrels in the US.  Should the storm drift into the New Orleans area, the effect could be greater as the about 1,700,000 barrels of refining capacity is located there.

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