Drudge has a round-up on the oil situation and the general disruption in power:
As half of the Gulf Coast refineries damaged by Hurricane Katrina begin to ramp up production this week, industry experts have this message: be patient.
“What you’ve got are a whole series of requirements and processes and that takes days, if not weeks,” said John Felmy, chief economist for the American Petroleum Institute.
The going is also slow for the restoration of offshore oil and gas production. Almost 70 percent of normal oil production and half of the natural gas output remains shut down, according to the U.S. Minerals Management Service, which said activity is slowly recovering.
Eight major refineries that produce gasoline, diesel and jet fuel and heating oil were knocked out of commission and the output at two others was cut by last week’s killer hurricane and the flooding that followed. That cut overall U.S. refining capacity by more than 10 percent and contributed to a surge in retail gasoline prices and spot shortages around the country.
With New York markets closed for the Labor Day public holiday, dealers reported only thin trading across many commodities in London yesterday.
Oil prices retreated to levels seen prior to the arrival of Hurricane Katrina as the release of emergency fuel stocks by industrialised nations soothed fears over a US energy crisis.
IPE Brent for October delivery fell $1.13 to $64.93 a barrel after the International Energy Association announced that its members would release 2m barrels of oil for thirty days to compensate for the loss of production and refining capacity cause by the impact of Katrina.
Dealers said futures prices were likely to continue their correction after WTI crude failed to break decisively through $70 a barrel last week, but said an aggressive sell-off appeared unlikely.
Other utilities are returning to service, as well:
Three utility companies that experience widespread Hurricane Katrina power outages reported progress Monday in restoring service to customers. But more than 800,000 customers still were without power, one week after Hurricane Katrina struck.
Entergy Corp. said it has restored service to more than half of the 1.1 million customers that lost power. Another 517,000 Entergy residential and business customers still have no power, mostly in Louisiana.
The Electric Power Association of Mississippi, a member-owned association akin to a credit union, said that more about 222,000 of its customers still remain in the dark.
Southern Co., whose utility subsidiaries serve customers in Mississippi, Alabama, and Georgia, said it restored power to about 44 percent of its Mississippi customers, leaving about 80,000 still to be reconnected.
Crews from more than 20 states and some Canadian provinces have joined local workers to bring power back to the hardest hit areas of Mississippi and Louisiana.
These are positive steps in the road back after this disaster.
Don Surber
Classic case of panic in the market. Lines at pumps are generally people topping off and filling containers
Poca Go-Mart Tuesday 2.49.9, Wednesday 2.99.9, Saturday 2.89.9
The daggone thing cured itself before AGs across the country could get camera time for their investigations
Kudos Bush for opening the reserves and ending summer gasoline two weeks early
More kudos to the old crews for a job well done
Don Surber
old=oil
Oh hell, them old oil crews
jobiuspublius
If this disaster does not spur a boom in the alternative energy industry, we are the dumbest country in the world.
Shygetz
My prediction: Don’t sell your Exxon stock. Recent history suggests that we are definitely not the smartest country in the world right now.
Mr Furious
Gas prices sure haven’t. They may have retreated slightly, but regular is pretty much $2.99 or more everywhere over the weekend and today. that’s a good 25-30 cents more than before the storm.
In the long run, I fear, this whole Katrina surge will serve as nothing but a way for people to think $2.89-2.99 is “cheap.” They crossed the three dollar threshold, and we should get used to it.
It’s only been a few months since a “refinery episode” pushed prices back over $2.00 for much of the country. I don’t recall prices ever going back down after that…
Mr Furious
If this disaster does not spur a boom in the alternative energy industry, we are the dumbest country in the world.
We certainly have the dumbest leadership. I can’t wait for the calls for drilling and exploration. And, of course, tax cuts.
hadenoughofthisyet
Absolutely right. I am very active in the stock market and the individual and sector oil and gas charts are in and continue to be in a very strong bull mode. As I am typing this the American Oil Index (XOI) has just reversed from it’s daily low and is headed back up. The charts and chatter I hear from those knowledgable in the field suggests that any pullback in prices is temporary.
DecidedFenceSitter
And in other news, a friend who works for a local Toyota Dealership has seen a dramatic change in the pricing of the Prius:
JonBuck
In other news, there is now a method to economically get shale oil with a postive energy return. They say $30/barrel production costs and a 3.5:1 energy return.
I hope they’re right.
jobiuspublius
Great link, JonBuck, thx. Key words to monitor: BLM, Bureau of Land Management, in-situ conversion, shale oil. Add some more.
From JonBuck’s link:
It’s almost disappointing though. Also, oil stinks, in so many ways. How will this impact other energy sources like wind? I read, forgot where, that the midwest from Montana on down to Texas can supply huge amounts of wind energy, far above what their politicians are already supplying.
This article is chock full of info.
jobiuspublius
Another thing crept into my head. If this technology is so simple then American oil companies are going to face competition over seas, especially from China, India, Russia, and Europe. Some powerless countries might find a new source of power, of more than one type. This is revolutionary. It’s almost like a step back to the 19th century, with nukes and globalization. I wonder if the oil industry will become protectionist. BP.
jobiuspublius
TallDave
Maybe they’ll actually build some new refineries. And some nuke plants, while they’re at it.
JonBuck
What’s really going to hit hard once winter hits are natural gas prices. Some are expecting $15 per thosuand cubic feet. That’s 3x as much as a year ago.
Sounds like electric heat will be cheaper… though much of the electrical generating capacity that’s been built for well over a decade is produced from natural gas.
Oops.
Randolph Fritz
You’re trusting Matt Drudge?
goonie bird
Its cuased by all those hollywood hypotcrits driving to their dumb awards shows in their gas guzzling limos