After Americans endured the highest gas price ever posted over a Labor Day holiday weekend and commodities outperformed stocks for the second month in a row, the sad part is, there seems to be too little gasoline relief in sight. Even with the winter blend switchover price bonus, already we are seeing that RBOB futures are continuing to move higher. From around the country reports of pain are coming in. Take Maine for example where according to reports from the AP. Price-monitoring website MaineGasPrices.com reports Tuesday that the average retail cost of a gallon of gas in Maine has risen to $3.89, that’s nine cents per gallon more than the national average.
Or Chicago where prices have been the highest in the nation, according to Suburban Life and AAA ‘s Daily Fuel Gauge report. And even though gas prices are high in Chicago this Labor Day, they were actually higher this past spring. In Oakland they were at $4.40 and in LA $4.37. The average price for a gallon of gas in the Chicago metropolitan area is $4.30 for regular grade gasoline, according to AAA’s Daily Fuel Gauge report. That price is about 15 cents higher than a week ago. Last Labor Day weekend, prices for the same grade of gasoline were about $3.99 a gallon. Gulf Coast and New York Harbor spot gas prices are rising again.
The Houston Chronicle is reporting that most of the offshore oil and gas crews evacuated from the Gulf of Mexico ahead of Hurricane Isaac are back on the job, and the storm appears to have caused only minor damage to rigs and platforms, according to initial federal reports.
More than 800,000 barrels, or 58%, of daily oil production in the Gulf remains offline, the Bureau of Safety and Environmental Enforcement said Monday. About 1.7 billion cubic feet, or 39 percent, of daily natural gas production in the Gulf is still shut in. But that's a significant improvement since last week, when as much as 95% of oil production and 72% of natural gas production went offline as Isaac barreled into the region. Six rigs and 71 production platforms remain evacuated, or less than 8% of the rig fleet, and about 12% of the platforms in the Gulf, according to the safety bureau.
Of the 11 Gulf Coast refineries affected by Isaac-related flooding and power outages, one has returned to normal operation and nine others are restarting or operating at reduced rates, the U.S. Department of Energy reported Monday.
Only Phillips 66's refinery in Belle Chasse, La., remains shut down, with a capacity of 247,000 barrels per day.
Yet RBOB is being driven by a host of factors, least of which seem to be the ongoing refining issues in the Gulf Coast created by Hurricane Isaac. Gas prices are also being driven higher by a rising crude price both from West Texas Intermediate but also North Sea Brent crude. Brent crude is hitting close to a 17-week high, being driven by seasonal maintenance as well as rising geo-political tensions. It is also being held hostage by more talk of economic stimulus, which is like mothers milk to oil bull market players.