Irma prep pushes Thunder Horse to 18-month high
Houston, 7 September (Argus) — Thunder Horse crude has climbed to its strongest premium to West Texas Intermediate (WTI) in 18 months as producer BP makes preparations for the second major hurricane to threaten offshore facilities in the past two weeks.
The light sour climbed 50¢/bl yesterday to trade at a $2.50/bl premium to WTI, reflecting its highest reported trade level relative to the US oil benchmark since early March 2016.
The price hike closely follows a BP update that the company is securing its US offshore facilities and evacuating non-essential personnel from its Thunder Horse platform in preparation for Hurricane Irma, which is moving toward the Caribbean at winds as strong as 185 mph.
Thunder Horse is BP's largest production and drilling platform in the US Gulf of Mexico, 150 miles southeast of New Orleans, and has an average crude production capacity of 250,000 b/d.
BP said no output has been shut in so far but that it was prepared to evacuate remaining offshore workers and close production facilities if need be.
Thunder Horse crude has averaged a $1.88/bl premium to WTI so far in the October trade month, which began 28 August in the aftermath of Category 4 Hurricane Harvey arriving at the Texas Gulf coast and while more than 330,000 b/d of offshore production remained shut because of the storm.
The grade averaged a 72¢/bl premium to WTI in the same period last month. Thunder Horse is poised to strengthen further if BP decides to completely evacuate the platform and shut in production.