Many eyes remain glued to the weather channel as Hurricane Irma makes its way closer to the US. The hits just keep on coming as an major earthquake struck Mexico overnight triggering Tsunami warnings and another potential storm system is developing off the coast of Africa in addition to the “other” 2 hurricanes we have today. To put in perspective how chaotic the weather scene is right now, one of the challenges cited yesterday in predicting Irma’s exact path is that the outflow from Katia is interfering with wind currents and confounding computer models.
Energy markets seem to be in wait and see mode this morning as traders catch their breaths after an extremely volatile couple of weeks. While diesel prices have been something of an afterthought during the gasoline rollercoaster of the past two weeks, ULSD futures have quietly climbed to their highest level in more than 2 years as global demand remains strong and several of the largest US producers remain offline.
More good news on the Harvey recovery front as both Explorer and Colonial pipelines restarted origin points that had been shuttered due to the storm. It will still be weeks until we get a full recovery, and the demand spike ahead of Irma certainly won’t help most of the South East, but these are major steps in the right direction.
The one chart that really matters from yesterday’s DOE report is the refinery throughput. Considering that many plants were operational through last Tuesday/Wednesday, we should see another large drop in next week’s report before the refinery recovery begins to show up in the data.
The “other” charts from the DOE weekly status report that show the dramatic effects of the refinery and port closures had.