Prognostication Test
OK, the first opportunity to test my paranoia is coming into play.
Hurricane Katrina sits in the Gulf. (Source National Hurricane Center) It is at this time a category 3 hurricane. Its forecast path is one that encourages it to get stronger, and it's expected to make landfall near the mouth of the Mississippi river - actually crossing the spur of Louisiana to get there but crossing the mouth nonetheless.
So first point of test is that we're going to see an interruption in gasoline production for, oh, at least a couple of days while the refineries in the strike zone batten the hatches. They'll have to not only because of the storm but because for at least 24 and up to 48 hours no ship is going to run through the storm to deliver oil in the Delta Ports.
Second part of the test is that gasoline stocks are at the bottom of historical averages. (Source Department of Energy) For whatever reason, the margin available isn't near as large as it's been in the past.
What this means is that next week we're going to see gasoline stocks drop below historical averages (new low). The closing alone is worth ten cents, maybe 15. Add in the crunch and..l
I am predicting national gasoline prices crossing the $2.70 line by Friday, September 2, 2005. It'll "just" be a spike - it'll start down. Except it'll run against at least one more major hurricane (the NHC says at least two and maybe four more before the season ends.) Plus all the "lesser" hurricanes that are expected over the next four to six weeks. But this is a test of the pressures, only. If I'm more or less on target, a week from today I'll see $2.70-$2.75 per gallon at the pump. (Where I am, we tend to be real close to the national average at the pump, give or take a nickel or so.)
Hurricane Katrina sits in the Gulf. (Source National Hurricane Center) It is at this time a category 3 hurricane. Its forecast path is one that encourages it to get stronger, and it's expected to make landfall near the mouth of the Mississippi river - actually crossing the spur of Louisiana to get there but crossing the mouth nonetheless.
So first point of test is that we're going to see an interruption in gasoline production for, oh, at least a couple of days while the refineries in the strike zone batten the hatches. They'll have to not only because of the storm but because for at least 24 and up to 48 hours no ship is going to run through the storm to deliver oil in the Delta Ports.
Second part of the test is that gasoline stocks are at the bottom of historical averages. (Source Department of Energy) For whatever reason, the margin available isn't near as large as it's been in the past.
What this means is that next week we're going to see gasoline stocks drop below historical averages (new low). The closing alone is worth ten cents, maybe 15. Add in the crunch and..l
I am predicting national gasoline prices crossing the $2.70 line by Friday, September 2, 2005. It'll "just" be a spike - it'll start down. Except it'll run against at least one more major hurricane (the NHC says at least two and maybe four more before the season ends.) Plus all the "lesser" hurricanes that are expected over the next four to six weeks. But this is a test of the pressures, only. If I'm more or less on target, a week from today I'll see $2.70-$2.75 per gallon at the pump. (Where I am, we tend to be real close to the national average at the pump, give or take a nickel or so.)
posted by Kirk at 10:36 AM
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