Handling Things Well

Well, after much panic in Asia this weekend, and many dire sounding reports (including, I suppose, my previous blog entry), energy markets and handling things very, very well so far today. NY light, sweet crude actually fell this morning, and is now trading below $68. OPEC sent a “calming” signal to the market by saying it would raise production (even though most OPEC barrels are weeks away from US ports), and President Bush is expected to announce this afternoon some kind of release (probably a sawp for future production) from the Strategic Petroleum Reserve. Most of which is located in Louisiana too.

NY harbor gasoline futures are still trading above $2 per gallon, and I expect gasoline will remain tight for some time. Especially if there is damage to refineries.

Sabine Pipe Line reopened the Henry Hub a few minutes ago, and the Minerals Management Service is expected to issue an update on how much production is shut in. But the key here is how much damage there has been to platforms and pipelines in the Gulf itself. If that’s minimal, and companies can get back into business quickly, then Katrina’s effects won’t linger. If not, futures markets will act accordingly.

Spot crude in the Gulf and Texas is up. Not significantly, anywhere from 50 cents to $1 per barrel.

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12:13 pm on August 29, 2005