Gasoline Prices Tumble As Refiners Resume Operations

Tyler Durden's picture

RBOB Gasoline futures tumbled to their lowest level in almost a week overnnight as several US Gulf Coast refineries reported their plans to restart operations after the devastation of Hurricane Harvey forced them to shutdown.

While about one-fifth of U.S. refining capacity is halted, according to data compiled by Bloomberg, some plants including those operated by Citgo Petroleum Corp. and Marathon Petroleum Corp. are preparing to restart.

The Oct '17 contract was down as much as 4% earlier before a modest bounce.

Moreover, compared to the squeeze in the September contract, RBOB prices have really tumbled...

Of course, this rather spoils Janet Yellen's transitory hopes for a burst of inflation to help her case when she next raises rates and while concerns had risen that higher gas prices could derail the Trump economy, it appears those risks are overblown. As The Hill reports,

Stephen Moore, a fellow at the Heritage Foundation and former Trump transition energy adviser, said "the negative effect will be not pretty."

 

“We’re talking about maybe knocking half a percent, or one percent, off GDP for a quarter or two, higher gas prices for sure, because Houston is the energy capital of the country. … So all those things are negative.”

 

Moore said he follows a rule of thumb that every penny increase in commercial gasoline prices takes $1 billion to $2 billion out of the economy from consumers.

 

That means that as prices rise after Harvey, the economy could be hit even harder, including from lost economic production in Houston — the country’s fourth biggest city — and the spending needed for a major federal recovery effort.

 

“It’s a question of how much the prices are already starting to rise,” he said. “I don’t know how fast this industry can recover … Could we see gas prices over $3? Potentially. That would be a big hit to consumer finances.”

 

A disrupted economy, driven in part by stout gasoline prices, could undercut one of President Trump’s most resonant messages with voters.

But with prices tumbling fast, this 'disruption' may merely be a storm in a teacup.

“The disruptions from Hurricane Harvey in the U.S. Gulf Coast are gradually clearing,” wrote analysts at JBC Energy GmbH. “In the broader scheme of things, it appears that so far the energy industry was spared major damages to assets and infrastructure.”

 The Energy Department also approved the release of 5.3 million barrels of crude from the Strategic Petroleum Reserve, but hope for refinery reopenings has prompted modest gains in WTI also...

“We’re awaiting news of continued normalization along the Texas Gulf Coast,” says Ole Hansen, head of commodity strategy at Saxo Bank. “Refineries are starting up and the next thing is to gauge the levels in different tanks from crude to gasoline and distillate”

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BritBob's picture

Meanwhile down south, Argentinian celebrations were short-lived -

Falklands Oil

By a ruling of the UN, Argentina will extend its maritime platform (Politica Argentina) ; New map of the maritime platform reaffirms the sovereignty of Malvinas with UN endorsement (ElCronista); Argentina enlarges its territory 35%, with a UN endorsement ...(La Capital).To add to this euphoric atmosphere the Argentine Foreign Minister stated, ''This is a historic opportunity for Argentina. We have taken a great step in the demarcation of the outer limit of our continental shelf; the most extensive boundary of Argentina and our border with humanity,'' Foreign Minister Susana Malcorra told La Nacion, which tomorrow will publicly announce the details of this resolution. (Susana Malcorra, quoted by Dinatale M, La Nacion, Argentina, 27 March 2016).

 

But what is the truth...

Argentina's Continental Shelf Claims and The UN CLCA Commission (1 page):-

https://www.academia.edu/33898951/Argentinas_Continental_Shelf_Claims_-The_UN_CLCS_Commission

 

 

 

robertsgt40's picture

Yup. RBOB "collapsing". Now, let's see how long it takes for the prices at the pump to catch down. I'm sure it will be symmetric.  LMFAO 

Swampster's picture

The Refineries were "shut down" on purpose...TO GAS PRICE GOUGE THE GOYIM DRIVING ON LABOR DAY....

 

Up 60 cents in two days in East TN...and now, as if by magic.....

dogballs's picture

This is nothing. Let's see what happens to prices when WWIII starts

azusgm's picture

BCR -- Stoning, in the Old Testament sense of the practice, is looking like a pretty wise plan.

Big Creek Rising's picture

Stoning might have the desired effect now because of the left's feminization of males and the rise of video games. But 10 to 15 years ago? Not enough pain and suffering as God intended for the condemned because almost all boys grew up playing baseball and the pervet would most likely would have been knocked out with 3 or 4 rocks.

blueskyranch's picture

Kept telling friends and family that Texas' favorite son (oil) would be coming home sooner than expected. Haven't topped one auto tank off since week. No need. Rather put cheaper gas in tomorrow. 

Yog Soggoth's picture

Tell the gas stations in Florida. The price hike is creating more scare even in the interior. 2.59 to 2.69 average.

2_legs_bahhhhhd's picture

So, the 20% bullshit increase up here will revert back tomorrow? Ha!! I fucking doubt it.

How bout the oil companies just take the hit like all small businesses do when they engage in risky behaviour, like building infrastructure in a coastal flood zone?

Monopolies masquerading as benevolent corporations..... motherfuckers

blueskyranch's picture

Everything you do, everything you buy, every place you go is because OIL is available. OIL is everything. Don't doubt it and don't forget it. OIL is KING. Wind sucks (blows) and solar (heats) and goes. OIL is what powers everythig. OK deep breath now. Ahhhh

Faeriedust's picture

Once upon a time, oil was a novelty item used to make trick torches.  People and animals WORKED to make things move.  And almost nobody ever got fat.  Seventy-year-olds didn't get prostate cancer, either.  No lightweight, ultraflammable, self-setting nylon tents -- we had to hold poles with guy ropes and cover them with canvas and leather.  We marched about 12 miles every day, then spent two hours setting up camp and another hour waiting for dinner to cook on open fires.  Fell asleep before midnight after a couple of hours eating, drinking (think MadDog 20/20 cut half and half with water) and singing.  Stood two four-hour watches a day if we weren't on the move and one if we were.  Oil?  Who needs oil?  WE powered everything.  And life was a damn sight more FUN than it is now.

iampreparedru's picture

Those were the good old days. Ahh no.

Flying my ass to costa rica in 4 days to enjoy the cool mountains and then drive down to the warm beach. All on good cheap oil.

Solar does run the house.

Just in case it runs out. Always have a plan B and C and D.

Sofa King's picture

So last week when I said shit will be up and running in no time, it became a fucking down vote frenzy. Well ya'll can go ahead and eat me.

hanekhw's picture

Oh thank you. That thumb stuck in my eye during the Labor Day weekend was preventing me from driving. The oil companies can now stick it back in its usual place.

GETrDun's picture

just a bump for higher profits on the holiday weekend. Made the bonus for the quarter.

azusgm's picture

If ICE keeps moving forward with clearing up illegal immigration and some of Trump's economic protectionist policies are enforced, Grandma Yellen likely will get her inflation. Americans will learn how to put on roofs hang sheetrock, paint, install flooring, and set cabinets. There will have to be accountability from the employers regarding their hiring practices. Katrina alone should have been a good source of stimulus spending but the immigration laws were not enforced. Using legal manpower, wages will have to go up. Team that up with work requirements for welfare assistance and and you've gotten directions for the road to a sustainable recovery.

Faeriedust's picture

We've had work requirements for welfare for nearly 30 years, and the effect is marginal except for the amount of money spent hiring social workers to police the efforts.  First, both TANF (cash assistance) and SNAP (food stamps) are predicated on there being children in the household.  However if there is even a single child under the age of 7, the (single) mother is automatically excluded from the work requirement.  Then, they can avoid work by taking at least 15 weekly hours of education (all on the taxpayer dime, of course).  Third, they can be "disabled".  There are amazing varieties of Disability, all of which involve the State paying for all of the medical "care" and diagnostic testing soaked up by the malingerer.

For all practical purposes, it would cost LESS to do a Guaranteed Minimum Income than it does to track all of the excuses for not fulfilling work requirements, support payments for subsidized employment, medical bills for the legions of chronic fatigue syndrome and lower back pain, and the tuition for courses that usually concentrate on Physical Education, Fine Art, and of course Racial & Gender Studies.

A. Boaty's picture

Oil refiners have learned a lot since Katrina and Rita. No surprise they got back up and running faster this time.

azusgm's picture

Even in the 80's there were shutdown procedures for the oil refineries. They would close up shop and quit taking on more feedstock. Only essential personnel stayed in. The rest were sent home to deal with their families and property. Planning to do otherwise would be complete foolishness.

iampreparedru's picture

No wind and thus few power outages helped a lot.

pliny the longer's picture

oh wow, it almost seems like that little spike was all kabuki for labor day travel weekend; huh, fuk me i guess 

 

20-20 Hindsight's picture

You guys south of the Canadian border should consider yourselves lucky.  You only got mildly fucked in the ass.  Here the price of a litre of gas went up from 99 cents to $1.30 in less than a week.  We got gang raped.  Fucking pricks!

Yog Soggoth's picture

What the hell is a litre? Are you guys all retarded?

SweetDoug's picture

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Saggoth

 

A litre is a form of measuring liquids based on the metric system, an internationally recognized system of meaurements.

 

An American gallon, is made up of 3.78 litres, while a standard gallon is 4.54 litres.

 

Always here to help.

 

OJO

V-V

SweetDoug's picture

'

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Saggoth

 

A litre is a form of measuring liquids based on the metric system, an internationally recognized system of meaurements.

 

An American gallon, is made up of 3.78 litres, while a standard gallon is 4.54 litres.

 

Always here to help.

 

OJO

V-V

SweetDoug's picture

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Can you imagine the footstomping if gas prices went up $1.15 for the folks in the US?!?!?! 3.87 x .30 cents.

 

And what do the Canuckuckle heads do?

 

Nothing.

 

OJO

V-V

THORAX's picture

DONT MESS WITH TEXAS!