I've seen prices jump 40 cents at the station behind my school in 24 hours. I'm not sure if it is a shortage causing it, speculation, or just plain greed. And I'm not sure where the prices will go from here. I do know that I saw prices at $3.00 in Pasadena Texas -- you know, the town where all those refineries from Urban Cowboy are located.

We hear, of course, about the damage to and closure of energy-related facilities. That is bad.

But we may not be in for rising prices for long, if this information is correct.

Gasoline futures fell for the first day in five as some fuel pipelines shut by Hurricane Katrina were reopened and as refiners prepared to restart plants along the Gulf coast.

Colonial Pipeline Co. expected yesterday to raise gasoline and distillate shipments to 61 percent of their normal rate. Royal Dutch Shell Plc said it may next week re-start the Motiva refinery at Convent, Louisiana. At least eight U.S. refineries, more than 10 percent of the nation's capacity, remained shut for a sixth day because of flooding and blackouts from Katrina.

``It's certainly going to take a while to get everything back up,'' said Bob Frye, a commodity broker at Access Futures & Options Trading Inc. in Woodlake, California.

Gasoline for October delivery fell as much as 4.9 cents, or 2 percent, to $2.36 a gallon in after-hours electronic trading on the New York Mercantile Exchange. It was at $2.365 at 9:41 a.m. Sydney time.

Yesterday, the contract surged as much as 9.3 percent to $2.4650, before closing at $2.409 a gallon, marking a 30 percent gain this week. Prices today have almost doubled from a year ago.

The Gulf of Mexico receives more than half of U.S. oil imports and is home to about 50 percent of the nation's refining capacity. Power cuts, flooding and a lack of workers are hampering refiners' efforts to inspect plants and restore output.

So it looks like many of the facilities may have come through the storms in better shape than we feared -- but getting to them and getting folks to work at them may be a bigger challenge.

And we are being advised by the administration to expect $3.00 gas through Halloween.

But look at the bright side -- only through Halloween. We may have a restoration of supply to near normal before winter sets in.

Posted by: Greg at 03:09 PM | No Comments | Add Comment
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