Offshore Energy Staff Return as Edouard Hits Texas

Tropical Storm Edouard came ashore Tuesday morning near the east Texas refining hub of Beaumont and Port Arthur, Texas, allowing energy companies to return workers to offshore production sites.

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There were no initial reports of problems at the four refineries in Beaumont and Port Arthur, which have a combined capacity of 1.2 million barrels per day, equal to 6.6 percent of U.S. refining capacity.

Only Marathon Oil's 76,000 bpd Texas City refinery was closed after its precautionary shutdown on Monday.

The Louisiana Offshore Oil Port, the nation's only deepwater oil port, said it was resuming offshore operations and expected to offload its first tanker in over 24 hours by early Tuesday afternoon.

The New York Mercantile Exchange ignored Edouard for a second day on Tuesday.

September crude was down below $120 a barrel, after sliding as low as $118, the lowest price since May 5.

A small amount of offshore production was affected by Edouard with the U.S. Minerals Management Service reporting on Monday that out of the Gulf's total production only 0.9 percent of crude oil production and 7.2 percent of natural gas output was shut.

U.S. Gulf of Mexico production supplies about a quarter of the country's crude oil output and 15 percent of its natural gas, while Gulf Coast refiners make about a quarter of domestic gasoline.

Chevron and Shell said they were returning evacuated workers to offshore platforms while BP said it was standing down from its preparations.

Chevron had not disclosed the number of workers evacuated while Shell pulled 43 people out of the offshore as the storm moved toward the Texas-Louisiana border.

On Monday, forecasts called for Edouard to cross Galveston Island and bring high winds and heavy rain to Texas City, prompting the precautionary shutdown of Marathon's refinery.

Edouard surprised forecasters Tuesday morning with a turn to the north putting the Texas-Louisiana border in its bull's eye.

The port of Houston and the Sabine Pass Ship Channel remained closed due to rough seas.

The shipping interruption led Valero Energy to reduce production at its 130,000 bpd Houston refinery and its 245,000 bpd Texas City refinery.

A series of powerful hurricanes in 2004 and 2005, including Hurricane Katrina, toppled oil rigs and severed pipelines in the Gulf, pushing oil prices to then-record highs.