All Eyes Focus on Tropical Storm Isaac

On August 28, 2012 by TradingDesk

All eyes continue to focus on Tropical Storm Isaac, which is scheduled to make landfall tonight or early tomorrow in SE Louisiana near New Orleans as a category 1 or 2 hurricane. Tomorrow is the 7th anniversary of Hurricane Katrina, which for some perspective was a category 5 hurricane at this stage in its life, and made landfall as a category 3 storm. Gulf Coast cash gasoline prices, after spiking 24 cents yesterday, have already dropped by 9 cents this morning, as traders bet that the impacts will be relatively short lived, and that the refineries shut ahead of the storm will be back running within a few days.

Meanwhile, the Chicago market doubled the increases seen along the gulf coast, after Buckeye pipeline suffered another leak along its badger line running from Chicago to Wisconsin, and was forced to shut the pipe. Repairs are expected to take another few days, and prices are expected to correct by the end of the week.

Once the storm passes, assuming catastrophe is avoided in NOLA, all eyes will shift to the FED meeting in Jackson Hole WY later this week. 2 years ago, this was the location when Ben Bernanke unofficially announced QE2. For markets eagerly anticipating version 3 of quantitative easing, hopes are running high that history will repeat.

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