Gasoline Futures Surge as Concerns Shift to Storm-Battered Refineries

[NNN0LHI]

http://ap.tbo.com/ap/breaking/MGB02T473DE.html

Gasoline Futures Surge as Concerns Shift to Storm-Battered Refineries

Gasoline supplies tightened Thursday in markets that depend on shipments from Gulf Coast refiners and pipelines, and motorists increasingly faced pump prices well in excess of $3 a gallon.

Industry officials said a small-but-growing number of independent gasoline retailers in the Southeast and Midwest may simply turn off their pumps in the days ahead, either because of shortages or because wholesale prices climbed so high so quickly that they cannot compete without selling fuel at a loss.

"This will get worse before it gets better," said analyst Tom Kloza of Wall, N.J.-based Oil Price Information Service. He added: "A retailer has to decide 'Should I keep selling gas and keep losing $4,000 a day, or should I just bag my pumps until things get quieter?'"

Gasoline futures surged for the fourth day in a row on the New York Mercantile Exchange, sending prices 25 percent higher in less than a week. Unleaded gasoline for October delivery traded at $2.42 per gallon, an increase of more than 16 cents.

[MercutioATC]

1. In related news, Dow up 5.74...

:wtf:

[gratuitous]

2. "Well, ah, {harumph}, yes, it's terribly unfortunate what has happened"

But how can commodities traders use this catastrophe to their personal financial advantage?

[haktar]

3. I think most people don't understand the implications of Katrina

As usual Bush and the MSM didn't lie but instead told half truth.

The destroyed oil riggs don't have a major effect on Fuel prices.

The refineries do.

Before Katrina US refineries were already working at maximum capacity.
Now you lost some of them. So you can't produce the fuel you need domestically and you have to buy it in Rotterdam (gasoline not oil! and the release of some oil of your strategic reserve does not help anything, it's Oil!)

This has several implications:
You have to compete with Europe to get fuel from european refineries and in good capitalistic manner of supply and demand this means higher gas prices.
2nd: you imported oil and produced gasoline. This was counted in the GDP as added value. Now you not only lost this from your GDP, but also
3: the imported fuel adds to the trade deficit.

what do you have to expect: I now pay a little more than 7$ per gallon fuel. Roughly half of it are taxes. So expect at least 3.5 Dollar per gallon fuel on average.

on edit: typos

[macllyr]

4. Update on damage to Gulf oil rigs

Production from the gulf could be impaired for YEARS :
<snip>
There are MANY production platforms missing (as in not visible from the air). This means they have been totally lost. I am talking about 10's of platforms, not single digit numbers. Each platform can have from 4 to 100+ wells on it. Most larger ones have 20-30 wells in this area, with numerous caisson wells.
<snip>


www.theoildrum.com/story/2005/8/31/83553/8973

20 missing oil rigs....

news.yahoo.com/news?tmpl=story&u=/afp/20050831/ts_alt_afp/usweatheroilgulfrigs_050831213642

Mac l'lyr

[David__77]

5. Independent stations will close down for a while.

They won't be able to maintain acceptable prices.