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4 refineries out of commission for weeks to months

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lowecur

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Some 800,000 barrels of gasoline per day will not get to market anytime in the near future. Somebody's gonna get the short end of the stick, as Jet A and gasoline should continue to rise as delivery costs soar. Displaced markets will need to have supply trucked in as the SE Louisiana refineries deliver their product by oversea tanker and not the pipelines. Foreign refineries will step in to deliver the short gap, but it will take weeks to get here once the orders are placed.

http://biz.yahoo.com/ap/050904/katrina_refineries_hk3.html?.v=2
 
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Some 800,000 barrels of gasoline per day will not get to market anytime in the near future

WRONG...

The one thing Bush has done right in this whole mess is release an equal number of barrels from the reserve that is not being produced. There is no, and will be no shortage of oil.
 
chperplt said:
WRONG...

The one thing Bush has done right in this whole mess is release an equal number of barrels from the reserve that is not being produced. There is no, and will be no shortage of oil.

There's a difference between OIL and refined GASOLINE/JET-A/FUEL OIL/DIESEL/ETC... I agree that there will be no oil shortage but that is not what is being discussed here.
 
TRUE: Releasing oil from the SPR (Strategic Petroleum Reserve) will fill in that 800,000 barrel-per-day gap. But, this should have been done when oil was $35 per barrel. It would have sent a clear message to oil producers that the U.S. will not tolerate higher prices (for those who don't know, George H.W. Bush tapped the reserve to do so... why his son, W., didn't, is a matter of debate).

MORE TRUE: There will be no shortage of oil.

EXTREMELY MORE TRUE: The media, alarmists (i.e., those who mistakenly believe that there will be an oil shortage), and finally OPEC will emphasize the loss of refining capability. The daily onslaught of market panic will ensue, thereby keeping the price high, or driving it higher, despite the fact that there is no oil shortage. Most recent NYMEX settle price: $67. Welcome to the new target price... nothing lower than $50 per barrel. It's here to stay.
 
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DH106 said:
Welcome to the new target price... nothing lower than $50 per barrel. It's here to stay.

Steve Forbes seems to think differently. He says the oil bubble will burst within the next 12 - 18 months and prices will drop well below $45 a barrel
 
Thedude said:
Steve Forbes seems to think differently. He says the oil bubble will burst within the next 12 - 18 months and prices will drop well below $45 a barrel

I sure hope he's right! Then again, he also thought he would be president...twice!
 
Yes, the Strategic Reserve is unrefined crude. That will be released to ease the supply side to operating refineries.

The Europeans have pledged to release some of their reserves which, strangely enough, come in the form of already refined gasoline. Hopefully this will allow the remaining refineries to produce more Jet-A, as refined gasoline is en-route from Europe.

The long-term effect of this entire disaster (oil-wise) should be a loud wake-up call to the US regarding oil production. When the refineries operate at 99% capacity for years nobody notices. But get just one disruption and gas jumps $1/gallon in less than a week: THAT get's people's attention. Result: any politician that tries to block new refinery construction will get buried in the next election. I also wouldn't be surprised to see all of the crazy patchwork of geographic "blends" of gasoline get revised or eliminated.

Just my opinion, and it's worth what you paid for it!
 
Any insurance *ahem* professionals here?

Insurers drop again on concern Katrina losses will grow

By Alistair Barr
Last Updated: 8/31/2005 4:08:07 PM


SAN FRANCISCO (MarketWatch) - Insurance stocks fell for a third day Wednesday on concern that industry losses from Hurricane Katrina could be worse than initially thought.
Katrina hit Louisiana, Mississippi and Alabama on Monday packing 145 mph winds. Catastrophe modeling firms, such as Risk Management Solutions and Eqecat, estimated earlier this week that the storm could cost the insurance industry between $9 billion and $25 billion.

However, since those estimates came out on Monday and Tuesday, flooding in New Orleans has added an extra element of uncertainty and potential cost, analysts said.

"People have seen how bad things are on CNN and are saying 'My God it's worse than we thought,'" Ira Zuckerman, an insurance analyst at Stanford Group, said. "New Orleans has been wiped out. What hasn't blown down is underwater and is likely uninhabitable."

Breached levees and the extensive flooding of New Orleans that followed have increased the chances of large business-interruption claims and made disputes over insurance coverage much more likely, analysts said.

"The breach of the levee in New Orleans could prolong the emergence of loss, thereby increasing ultimate losses and raising numerous additional coverage questions," Charles Gates, an analyst at Credit Suisse First Boston, wrote in a note to clients on Wednesday.

These new concerns rattled shares of insurers and reinsurers.

"This is a very severe disaster that won't be cleaned up for some time and will probably cost more than people initially thought," Zuckerman added.

Allstate Corp. (ALL), the second-largest homeowners insurer in Louisiana and the No. 3 in Mississippi and Alabama, fell 43 cents to $56.21, adding to its declines on Monday and Tuesday.

St. Paul Travelers (STA), another leading insurer of homes and businesses in the region, dropped 2.1% to $43.01. That rivaled the decline in the shares on Monday and Tuesday combined.

Reinsurers such as Axis Capital (AXS), PXRE Group (PXT) and Arch Capital (ACGL), fell more than 2% on Wednesday on concern they'll have to pick up a bigger portion of the losses from Katrina than they did from last year's four hurricanes.

"Because this is one storm rather than four this will mean reinsurers will have to pay more of the losses," Zuckerman said.

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Figured if insurance agents are talking about the airline industry, maybe some pilots should talk insurance. Whaddya say?

JD

P.S. Still waiting patiently for THE ORDER. BBBGAWWWK!


 
The refinery situation is better than is being reported, that's why prices of oil and gas futures are declining.
 

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