As TTAC mentioned previously, the imperfect storm known as Hurricane Gustav is about to add to the perfect storm known as Detroit's annus horribilis. (O.K., Motown's blues have been at least three decades and 194 General Motors Death Watches in the making. But literary needs must.) The Detroit Free Press reports that the Cat 2 hurricane busy ravaging the Louisiana coastline will temporarily stifle a big ass chunk of America's oil supply. "Altogether, about 2.4 million barrels of refining capacity have been halted, roughly 15 percent of the nation’s total, according to figures from Platts, the energy information arm of McGraw-Hill Cos. The U.S. Gulf Coast is home to nearly half the nation’s refining capacity." Even if the oil industry can restart production more quickly than it did post-Katrina, pump prices are bound to be singing along with the Yaz. "As of midday Sunday, about 96 percent of the Gulf’s oil production and 82 percent of its natural gas output had been shut down, according to the U.S. Minerals Management Service, which oversees offshore activity." The Freep predicts a twenty cent– or higher– gas price spike.
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Looks like outdated news already. Current AP news has this:
“Oil prices tumbled to $111 a barrel Monday as Hurricane Gustav weakened along the Gulf Coast and posed less of a threat to oil drilling and refining operations.”
And so on. Hopefully, we won’t even see a blip at the gas pump.
“Hopefully,” I said!
Following on Gustauv’s heels are Hanna and Ike each battering a part of the Bahamas…another new storm formed off of Africa which is expected to become a major hurricane too.
The Today Show (today) predicted a possible BELOW 100 oil price.
Specultion!
There’s no damned speculation driving oil prices!
Gas prices here fell $0.10/gal over the weekend. A $0.20 price “spike” happens here about every thursday, then falls back.
Hindsight is 20/20, but crude is at $107.39 (down $8.07 per barrel) as of 8:57 a.m. eastern time.
Gas jumped up 10 cents and then another 5 cents over the weekend here in S. Georgia. Regardless of what the price of oil does I think the local gas stations are going to take advantage of the situation. Funny how the price jumps at the pump the second any possible bad news happens but takes weeks to a month to drop back down. As long as it doesn’t raise the price of food yet again I don’t care too much.
I think this major drop in prices has a lot to do with people getting out of their hedged positions that they took before the long weekend. I would expect to see gas prices come back up some during the day (or next few days). I know Hanna is projected to go up the east coast, but Ike is set to be another Gulf Hurricane, which could see gas prices rise again, if only on speculation of the damage.