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

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

**October 7, 2004**

**Highlights / Major Developments**

**Oil Hits New \$53 High on Winter Worries, Nigeria**

Oil prices scaled new heights at \$53 for U.S. crude on Thursday on
concerns over tight winter heating fuel supplies and an unexpected
strike at Nigerian oil terminals. U.S. light crude set a record \$53 a
barrel, marking a surge of \$20 or more than 60 percent this year,
closing up 60 cents at \$52.62 a barrel. Nigerian oil unions began an
unexpected two-day strike at Royal Dutch Shell Group facilities to
protest against feared job cuts. In Norway, oil rig workers said they
will widen a three-month strike on Saturday by closing another North Sea
field and increasing the amount of output hit to 55,000 bpd. Plans for
new output have also been delayed. U.S. supply worries have intensified
after Hurricane Ivan cut September U.S. crude production to its lowest
in any month since 1950 and disrupted operations at refineries along the
Gulf Coast. Reuters, 1443 October 7, 2004
<http://biz.yahoo.com/ap/041007/oil_prices_17.html>

[*http://www.platts.com/Oil/News/6267264.xml?S=n*](http://www.platts.com/Oil/News/6267264.xml?S=n)

**Electricity**

**Southern Co.\'s Hatch 2 Nuclear Unit Returns to Full Service**

Southern Co.\'s 924-megawatt Hatch 2 nuclear unit in Baxley, Georgia,
returned to full power from 85

percent of capacity yesterday, said spokeswoman Regina Waller. The
plant, about 125 miles southwest of Savannah, was shut Sept. 25 for
valve repairs, she said. Bloomberg News, 0910 October 7, 2004

**Petroleum**

**Shut-in Oil Production in Gulf of Mexico equals 27.95% of Daily
Production in Gulf** The cumulative (9/11/04-10/7/04) shut-in oil
production is 16,560,590 bbls which is equivalent to 2.737% of the
yearly production of oil in the Gulf of Mexico which is approximately
605 million barrels. <http://www.mms.gov/ooc/press/2004/press1007.htm>

[**\[\$\$\] Difficulties Fixing Oil Platforms In Gulf Are Helping Boost
Prices**](http://us.rd.yahoo.com/finance/industry/news/latestnews/*http://us.rd.yahoo.com/finance/external/wsj/SIG=11vqelvb0/*http://online.wsj.com/article/0,,SB109710182412638522,00.html?mod=yahoo_hs&ru=yahoo)\
The Wall Street Journal Online - Thu 10:16 am ET

**Shell: Some US Gulf Output To Remain Off Line into 2005**
<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=5170560>
Bloomberg News, 1129 October 7, 2004

**Marathon Says Texas City Refinery Slowed by Fire**

Marathon Ashland Petroleum on Thursday said its 76,000-barrel-per-day
Texas City, Texas, refinery was slowed due to a small fire in a seal of
its crude distillation unit.

Reuters, 1441 October 7, 2004

Bloomberg News, 0924 October 7, 2004

Opis Price Watch Alert, 1040 October 7, 2004

**Oil-Tanker Rates Surge to Highest in Three Decades**

Oil-tanker rates from the Middle East and West Africa surged to the
highest since the 1973 Arab embargo as crude reached records.

Bloomberg News, 1311 October 7, 2004.

**Court Ruling Means GA Will Have to Sell PFG** Unless it can overturn a
U.S. District Court decision, Georgia, like it or not, will have to sell
RFG next year. Judge Clarence Cooper today denied the state\'s motion
for a preliminary injunction to prevent implementation of the federal
RFG requirement. A suit filed by Georgia had claimed that EPA was trying
to force Georgia to sell RFG, taking action that was not in conformity
with Georgia\'s state\
implementation plan. Georgia\'s SIP requires low sulfur gasoline in 45
counties. Judge Cooper stated that he was denying the plaintiff\'s
motion because it\
Oil Price Watch Alert, 1551 October 7, 2004

**Nigerian Shell oil workers launch two-day strike**

Nigerian workers for the Anglo-Dutch oil giant Shell launched a two-day
strike

on Oct 7 in protest at planned job cuts, as renewed supply fears pushed
crude

prices to record highs.

<http://www.platts.com/Oil/News/9333462.xml?S=n>

**Nigeria Labor Leader Says Strike Monday Unavoidable** The Nigeria
Labour Congress, the country\'s biggest union, said a general strike
planned to start on midnight Sunday to protest an increase in fuel
prices is unavoidable unless the government is willing to hold talks.
Talks between the unions and the labor ministry broke down yesterday. In
a separate development, Royal Dutch/Shell Group, Nigeria\'s largest
crude oil producer, said today two oil workers\' unions started a
two-day strike to protest plans to cut costs.

Bloomberg News, 1314 October 7, 2004

[**Saudi Aramco Embarks on Drilling
Frenzy**](http://www.energyintel.com/DocumentDetail.asp?document_id=132385)\
As it promises the world to bolster production capacity, Saudi Arabia
has embarked on a flurry of drilling activity at its Eastern Province
oil fields, International Oil Daily has learnt. State Saudi Aramco has
been tendering fervently for drilling rigs over the past six months, and
evidence suggests this trend will continue for the medium term.

International Oil Daily, October 7, 2004

**Natural Gas**

**Shut-in Gas Production in Gulf of Mexico equals 14.43% of Daily
Production in Gulf**\
The cumulative (9/11/04-10/7/04) shut-in gas production is 72.279 BCF
which is equivalent to 1.624% of the yearly production of gas in the
Gulf of Mexico which is approximately 4.45 TCF.
<http://www.mms.gov/ooc/press/2004/press1007.htm>

**Other News**

**Some Presentations from Winter Fuels Outlook Conference October 6,
2004** (Click on presenter's name in blue text to be taken to
presentation).

**Winter Weather Forecast**

[Michael
Halpert](http://www.naseo.org/events/winterfuels/2004/presentations/Halpert.pdf),
Head of Forecast Operations, Climate Prediction Center, National Oceanic
and Atmospheric Administration\
**\
World Oil Overview**

[Paul
Horsnell](http://www.naseo.org/events/winterfuels/2004/presentations/Horsnell.pdf),
Barclays Capital\
\
**EIA Winter Heating Fuels Overview**

[Guy
Caruso](http://www.naseo.org/events/winterfuels/2004/presentations/Caruso.pdf),
Administrator, Energy Information Administration\
\
D**istillate In Depth -- The Supply, Demand, & Price Picture for Winter
04-05\
**[Cheryl
Trench](http://www.naseo.org/events/winterfuels/2004/presentations/Trench.pdf),
President, Allegro Energy Consulting\
\
**Natural Gas -- Domestic Production and Demand Forecast\
**[Kevin
Petak](http://www.naseo.org/events/winterfuels/2004/presentations/Petak.pdf),
Director, Energy Modeling and Forecasting Energy and Environmental
Analysis, Inc

**DOE Suspends Radioactive Shipments through Arizona**

<http://pro.energycentral.com/professional/news/power/news_article.cfm?id=5168167>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (10       | Ago**     | Ago**      |
|                               | /07/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 52.67     | 49.56     | 30.48      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 5.86      | 6.36      | 4.66       |
|                               |           |           |            |
| **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