Gasoline Prices Soaring

On August 27, 2012 by TradingDesk

Gasoline prices are soaring this morning, as Tropical Storm Isaac shifted west over the weekend and now has New Orleans – and a cluster of area refineries – in its sights. RBOB futures are up 11 cents, and Gulf Coast unleaded for the prompt Colonial pipeline cycle is up more than 27 cents so far. In addition to the storm threat, Venezuela’s largest refinery had a tragic explosion over the weekend, killing 41 people, and while the plant is expected to come back online shortly, this should keep a bid under the gulf coast for now.

While roughly 1/4th of gulf coast oil output has been shut in, and 1/5th of the country’s refining capacity could be impacted, markets are reacting as though this will be a relatively short term event. Current forecasts support this theory, with the storm intensity currently nowhere near the levels of Katrina/Rita in 2005 or Ike in 2008.

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