Gasoline Falls on Speculation Plants Escaped Isaac Damage
Gasoline fell on speculation that South Louisiana refineries escaped major damage from Hurricane Isaac and downtime will be limited.
Futures declined as Isaac, which has weakened to a tropical storm after making landfall on the Louisiana Gulf Coast Aug. 28 as a Category 1 hurricane, was forecast to weaken to a tropical depression by later today as it moves into North Louisiana. Isaac caused the shutdown of six refineries representing about 13 percent of Gulf Coast capacity.
“Gasoline is down for a third day as the storm hasn’t done any major damage to refineries, though it’s still going to be a challenge to get back to normal,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “There’s also some rollover pressure on the September contracts.”
September-delivery gasoline fell 1.77 cents, or 0.6 percent, to settle at $3.0826 a gallon on the New York Mercantile Exchange. It was the first three-day decline since July 25. The more actively traded October contract fell 0.88 cent to $2.908.
Valero Energy Corp., which shut its Louisiana refineries in Meraux and Norco because of power outages and flooding risks, said neither apparently had major damage to production units and crews were able to get into the plants today for inspections.
“They’re taking the long journey back to restart those refineries,” Flynn said.
Heating oil for September delivery rose 0.88 cent, or 0.3 percent, to settle at $3.1245 a gallon. October heating oil advanced 1.09 cents to $3.1333.
Regular gasoline at the pump, averaged nationwide, rose 2.2 cents to $3.826 gallon yesterday, the highest level since April 26, AAA data showed. The average has climbed 50 cents, or 15 percent, since the year-to-date low of $3.326 on July 1.
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