Yesterday, US energy markets took Katrina calmly, coming down off $70 per barrel for light, sweet crude. Today, however, is another matter.
NY Harbor gasoline — the basline wholesale price and the futures contract — halted trading for five minutes this morning after trading “limits up,” that is, hitting the contract price band ceiling. In the case of gasoline, that is 25 cents either way from the opening, so gasoline was up 25 cents to more than $2.30 per gallon. However, Dow Jones is reporting US Gulf spot wholesale gasoline selling over $3.
Crude is up $3 per barrel, and set a new record at $70.55.
Damage reports are only beginning to trickle in. While most of the Gulf Coast’s big refineries escaped serious damage, they are all still down. About 12% of US refining, and nearly a quarter of domestic crude output, remains shut. It will take a week or two — if the damage is minimal, and right now it appears to be — to sort it all out. A number of refineries will, I’m guessing, take this situation to do autumn maintenance and conversion early.
10:45 am on August 30, 2005
