Here you were just getting used to some relief on gas prices and anticipating more was in the offing, when Mother Nature goes and wreaks havoc with your hopes.
From Bloomberg:
Almost 20 percent of the nation’s oil refining capacity was shut after Hurricane Ike slammed into the Gulf Coast today, limiting fuel deliveries and prompting analysts to predict gasoline prices may again reach $4 a gallon…
Wholesale gasoline in the Gulf Coast market this week climbed before Ike’s arrival by 58 percent to $4.65 a gallon, according to Bloomberg data. Regular, self-serve gasoline at the pump rose 5.8 cents to an average $3.733 a gallon, AAA said today on its Web site. The price reached a record $4.11 on July 15…
Gasoline shortages may occur across the southern U.S. up to Washington because of the closures caused by Hurricane Gustav, which made landfall Sept. 1 in Louisiana, and now Ike, Kevin Kolevar, assistant secretary for electricity delivery and energy reliability at the U.S. Department of Energy, said on a conference call yesterday….
The storm idled about 99.7 percent of oil production and 98.5 percent of natural-gas output in the Gulf of Mexico, the U.S. Minerals Management Service said today. Gulf fields produce 1.3 million barrels oil a day, about a quarter of U.S. output, and 7.4 billion cubic feet of gas, 14 percent of the total, government data show.
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I *yike* Ike.
Get used to it? It’s already happened: gas jumped (depending on exactly where you live) between $.50 and $1.00 a gallon on Friday in Arkansas, Louisiana, and east Texas. Some stations were out as well.
We’ve already got +$4 a gallon gas here in S.E. Mich ($4.11- $4.22 yesterday). No ‘prediction’ needed.
From the Bloomberg article you referenced:
“`We expect to see constrained supplies of refined products,” he said. “The administration will utilize every tool at our disposal to lessen the likelihood of limited fuel supplies,” including tapping the Strategic Petroleum Reserve.”
This is too silly for words. If Gulf Coast refining capacity is almost completely shut in, how would additional crude from the Strategic Petroleum Reserve alleviate a shortage of refined products? Just what are we supposed to do with the crude? Transship it to another country for refining over there and ship the product back here? Just asking.
Just fyi, Tom Kloza has a pretty good analysis of the refinery capacity/gasoline price dynamic.
He also reiterates that refinery shutdowns mean that nobody is refining crude, which means crude supplies begin building and prices should fall (yet, cnbc anchors are perpetually aghast that oil is trading down during hurricane season…but it makes sense as, like the scarecrow in the wizardof oz, they too perpetually long for brains)