Energy companies in the Gulf of Mexico started shutting in production on Thursday and evacuating some workers as Tropical Storm Karen headed toward a region producing nearly a fifth of daily U.S. oil output.
The National Hurricane Center expected the storm to move through one of the most productive areas of the Gulf to reach the Gulf Coast between Louisiana and the Florida Panhandle over the weekend. It said the storm could become a hurricane before hitting the coast.
In the Gulf Coast cash gasoline market, differentials surged about 3.00 cents per gallon on storm concerns, traders said. The Gulf of Mexico accounts for some 19 percent of U.S. daily oil production and about 6 percent of daily natural gas output, according to the U.S Energy Information Administration.