As Hurricane Sandy touches down on the east coast, those in the oil and gas industry are bracing themselves for any significant ramifications caused by the storm. As we have seen in the past, natural disasters have had a monumental effect on both supply and demand, and this latest event should be no different.
According to a report from the Associated Press, prices dropped by a substantial margin on Monday as refineries cut crude production. This was done in anticipation of the hurricane, which is expected to knock out power along the eastern seaboard and reduce energy demands.
Purvin and Gertz energy consultant Victor Shum told the news source that while many of these actions are precautionary measures, he believes that they will be validated when actual consumption is revealed to be down.
"Quite a few refineries on the east coast have reduced throughput in preparation for the hurricane to hit the US east coast and that means crude oil consumption is going to come down," Shum said.
However, a dip in consumption during the storm may eventually result in a massive spike in demand once the storm passes. Businesses and individuals will need tools to assist their cleanup efforts as they return to normal operations. Any drastic changes in oilfield production needs tend to balance out over time, so all field workers must be prepared.
As a result, it's best for companies to invest in proper oilfield equipment. This will help ensure that producers are prepared for any drastic changes in production needs, whether they be increases or decreases. Solutions such as artificial lift help companies build efficiency into their extraction efforts and limit any wasted effort or resources.
Producers should always be ready for major shifts in their daily oilfield operations. Consulting an oilfield technologies provider will help companies acquire the right solutions to fit their needs.