![](media/image1.jpeg){width="8.5in"
height="3.5027777777777778in"}**U.S. DEPARTMENT OF ENERGY**

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**October 8, 2004**

**Highlights / Major Developments**

**Oil Breaks More Records, Tops \$53**\
**Key Gulf Port Halts Unloading; Nigerian Oil Workers Strike** Crude-oil
futures closed above \$53 a barrel Friday as a confluence of factors
sent prices higher, breaking another record in New York and logging a
gain of more than 6 percent for the week.
[http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BF775989E%2DD896%2D4E9B%2DBD36%2DF48692DEA8E0%7D](http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid={F775989E-D896-4E9B-BD36-F48692DEA8E0})

**Henry Hub Cash Sheds Nearly \$1 Amid Conflicting Indicators**

Spot market volatility continued Friday as the Henry Hub cash market
sank

nearly \$1 amid heavy volumes during mid-morning trading to average in
the mid-\$5.30s/MMBtu, leading the way for a decline across the US.
[http://www.platts.com/Natural%20Gas/News/2646701.xml?S=n](http://www.platts.com/Natural Gas/News/2646701.xml?S=n)

**Electricity**

**Wolf Creek Nuclear Unit in Kansas Shuts After Lightning Strike**

The 1,235-megawatt Wolf Creek 1 nuclear reactor in Burlington, Kansas,
shut down automatically

on Thursday after a lightning strike in the switchyard. The operator of
the Wolf Creek nuke expects to restart the unit over the weekend.
Bloomberg News, 0850 October 8, 2004

Reuters, 1325 October 8, 2004

**AEP's Welsh 1 Shut on Thursday**

AEP's Welsh 1 528 MW coal-fired unit shut on Thursday. It is expected to
be up and running by Monday October 11.

Reuters, 1433 October 8, 2004

**Petroleum**

**Shut-in Oil Production is Equivalent to 27.95% of Daily Production of
Oil in Gulf**

The cumulative (9/11/04-10/8/04) shut-in oil production is 17,035,766
bbls which is equivalent to 2.816% of the yearly production of oil in
the Gulf of Mexico which is approximately 605 million barrels. This oil
has been shut in due to damage from Hurricane Ivan

<http://www.mms.gov/ooc/press/2004/press1008.htm>

## Louisiana Offshore Oil Port (LOOP) Officials Suspend Offloading, Again

## LOOP officials told OPIS that offloading of crude oil tankers has been suspended as of 4 a.m. this morning due to weather conditions and will likely remain on hold until Sunday. OPIS Price Watch Alert, 1037 October 8, 2004

Bloomberg News, 1350 October 8, 2004

## Shell Suspends Operations for Bad Weather

## Shell said repairs to oil pipelines in the Gulf that were damaged by Hurricane Ivan were halted Friday because of inclement weather. Bloomberg News, 1350 October 8, 2004

## Reuters, 1142 October 8, 2004

## 

## Offshore Still in Catch-up Mode

### Gulf Pipelines Had More Damage than Was Thought

Nearly three weeks after the Gulf of Mexico churned under Hurricane
Ivan, oil and gas production remains well below normal levels because of
slow repairs and widespread pipeline problems. Rick Mercier, director of
the Offshore Technology Research Center at Texas A&M University, notes
that most offshore production facilities are coming back on line at a
predictable pace, but there has been more damage to undersea pipelines
than expected. \"There was a fair amount of sea floor movement due to
the storm that wasn\'t appreciated earlier,\" Mercier said. \"So the
production facilities are getting back on line, but the pipelines to get
that production onshore experienced more leaks than expected.\"
<http://www.chron.com/cs/CDA/ssistory.mpl/business/2836341>

**Strategic Petroleum Reserves Loan of Oil Summary**

<http://www.fe.doe.gov/programs/reserves/spr/spr_loansumm_100604.pdf>

**U.S. Natgas Spike Spurs Fuel Oil Imports from Europe**

Fuel oil exports from northern Europe to the U.S. are on the rise as
U.S. utilities eye a switch away from natural gas, which has seen prices
jump by a third over the past month, traders said on Friday. The natgas
spike in the U.S. has encouraged the country\'s power plants to stock up
on cheap fuel oil, triggering higher prices for the oil product in New
York and opening the spot arbitrage from Europe.

Reuters, 1146 October 8, 2004

**Wider Norway Oil Rig Strike to Cut Daily Output by 55,000 Barrels**
Norway\'s oil rig strike is set to escalate Friday night, cutting total
output by around 55,000 barrels of oil a day, the Norwegian Shipowners
Association told Dow Jones Newswires Thursday.
<http://biz.yahoo.com/ap/041007/norway_oil_strike_1.html>

**Shell Says Nigeria Strike Still On, Exports Normal** A two-day strike
at Royal Dutch/Shell Group\'s Nigerian venture, the top oil producer in
the West African nation, is scheduled to end today without affecting oil
and gas production and exports, the company and union leaders said.
Bloomberg News 0732 October 8, 2004

**Nigerian Oil Workers to Strike Monday; Another Ends** Nigerian oil
workers will join a general strike set for Monday to protest an increase
in fuel prices, as another walkout was due to end today without
disrupting supplies from Africa\'s biggest producer (Shell). Bloomberg
News, 1320 October 8, 2004

**Natural Gas**

**Shut-in Gas Production is Equivalent to 14.43% of Daily Production of
Gas in Gulf**

The cumulative (9/11/04-10/8/04) shut-in gas production is 74.055 BCF
which is equivalent to 1.664% of the yearly production of gas in the
Gulf of Mexico which is approximately 4.45 TCF. This gas has been
shut-in due to damage from Hurricane Ivan.

<http://www.mms.gov/ooc/press/2004/press1008.htm>

[**Gap in Supply, But Anadarko Builds Canadian LNG
Terminal**](http://www.energyintel.com/DocumentDetail.asp?document_id=132638)\
Anadarko Petroleum will break ground on its recently acquired Bear Head
liquefied natural gas (LNG) terminal in Nova Scotia next week even
though supply arrangements are not yet in place, said Robert P. Daniels,
Anadarko\'s senior vice president for exploration and production. The
company is proceeding even though it does not have all the links in the
LNG value chain connected. At some point, Anadarko intends to bring in a
partner who will participate on an equity basis.

Oil Daily, October 8, 2004

**Other News**

Nothing to report.

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (10       | Ago**     | Ago**      |
|                               | /08/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 53.40     | 50.16     | 29.60      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.59      | 5.38      | 4.84       |
|                               |           |           |            |
| **Henry Hub**                 |           |           |            |
|                               |           |           |            |
| \$/Million Btu                |           |           |            |
+-------------------------------+-----------+-----------+------------+

> Source: Reuters

**This Week in Petroleum** from the Energy Information Administration
(EIA)

[*http://tonto.eia.doe.gov/oog/info/twip/twip.asp*](http://tonto.eia.doe.gov/oog/info/twip/twip.asp)

Updated on Wednesdays

**Weekly Petroleum Status Report** from EIA**\
**[*http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html*](http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html)

Updated after 1:00pm (Eastern time) on Wednesdays

**Natural Gas Weekly Update** from EIA

[*http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp*](http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp)

Updated after 2:00 pm (Eastern time) on Thursdays