Market Watches Supply Drop in Ike's Wake
Spot shortages cause prices to soar.
Bryce Knorr
Published: Sep 17, 2008
Oil and water don't mix, but the fallout on energy prices from Hurricane Ike remains hard to fathom, due to the extreme volatility shaking worldwide markets this week. While crude oil futures fell to new lows, threatening a test of $90, product prices in the cash market soared higher in many areas due to spot shortages caused by the series of storms that battered facilities in Louisiana and Texas over the past two weeks. Wholesale prices showed signs of settling down, but prices at the pump remain elevated.
Crude oil moved higher on Wednesday, helped by a huge surge in gold prices and a friendly weekly inventory report. While traders expected a 3.8 million barrel drop in crude oil supplies, the government reported stocks actually fell 6.3 million barrels. Gasoline supplies also fell, falling 3.3 million barrels, taking supplies to the lowest level since 1990, but the cut was actually smaller than the trade expected by about 500,000 barrels. Distillates were the odd man out, falling only 900,000 barrels, a million less than expected, but that appeared to make little difference.
Though the market breathed a sigh of relief after the weekend when Ike's surge was less than expected, damage remained after the waters retreated. The government reported Tuesday that Hurricane Ike destroyed 28 oil platforms and damaged others in the Gulf, as the extent of the storms impact begins to become clearer.
To read Bryce Knorr's complete weekly energy review, click HERE.
Permalink: Click here
Tagged: farmfutures, farmfutures.com, bryce knorr
|