Energy markets are finally seeing a sigh of relief pullback this morning after the panic buying reached a fever pitch Thursday, sending gasoline prices in several markets up more than 20 cents on the day.
Tight supply allocations are in force across most of the country, and the news outlets are certainly doing their part to stir up panic buying, as inventories begin to dwindle due to pipeline delays, closures and consumers rushing to top off tanks for fuel they probably don’t need.
The good news: Colonial and Explorer pipelines both said they planned to begin restarting parts of their systems over the weekend which means they expect enough refined product to be ready to be pushed up the line, which means the refineries are indicating to them they’ll at least have some activity very soon. In addition, widespread waivers on RFG and RVP restrictions will allow much more product to be produced in markets not effected by the storm.
The bad news: Hurricane Irma is making its way across the Atlantic, and is forecast to be a category 3 or 4 storm that could head towards either the US East or Gulf coasts next week. Fortunately most models keep this system east of the areas that have been devastated by Harvey, but then again, 2 weeks ago Harvey was headed for Mexico.
The unreported news: Several of the major gulf coast refineries that are down due the storm were actually scheduled to have units down for maintenance in September anyway. It’s likely that those plants will delay the maintenance plans to get product to the consumers ASAP.
Don’t adjust your dial when you see RBOB prices down 40 cents this morning, that’s just the roll from the September contract that expired at a 2 year high of $2.1399 and the newly prompt October contract. Cash markets are only down around 4 cents so far today.