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Shell to Operate Alabama Chemical Hub Despite Hurricane Sally

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Royal Dutch Shell plc (RDS.A - Free Report) has decided to continue operating at its Mobile, AL chemical plant and oil refinery even during the landfall of Hurricane Sally. However, the facility will be operated by the essential staff only that will be ready to evacuate if conditions warrant.

Shell’s Saraland plant, which processes foreign and domestic crudes to produce heavy olefin feed as well as liquid petroleum gases, gasoline and kerosene with 87,500 barrels per day of production, is in the landfall path of the storm, per forecasts. In order to counter the storm, Shell reduced production at its Norco refinery in Louisiana with capacity worth 227,000 barrels per day to minimum rates.

This currently Zacks Rank #2 (Buy) Shell already curtailed oil volumes at its large Olympus, Mars and Appomattox platforms, thereby joining BP plc (BP - Free Report) , Chevron Corporation (CVX - Free Report)  and Equinor (EQNR - Free Report) in closing down facilities in less than a month after Hurricane Laura knocked 1.5 million barrels per day of oil offline temporarily. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Per the U.S. Interior Department, almost 500,000 barrels per day of offshore crude oil production and 759 million cubic feet per day of natural gas output were halted in the U.S. Gulf of Mexico on Tuesday.

Impact of Sally

The U.S. National Hurricane Center already issued a warning of the severe Hurricane Sally that intensified into Category 2 with sustained winds of 105 mph, up from 85 mph on late Tuesday. Per the hurricane center, Sally is forecast to produce deadly historic rainfall across the northern parts of the U.S. Gulf Coast due to its exceedingly slow pace.

Hurricane conditions were spreading onshore from Pensacola Beach in Florida to westward in the Dauphin Island in Alabama. The center also hints at tornado possibilities.

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