Energy & precious metals - weekly review and outlook
Investing.com — Has U.S. gasoline demand peaked for this time of year? Well, that’s what the Labor Day holiday supposedly says.
To be sure, the Energy Information Administration, or EIA, reminded us in its “This Week in Petroleum” report that the Sept 2-4 holiday weekend marks the unofficial end to the U.S. summer driving season.
As of Friday, average pump prices of gasoline listed by the American Automobile Association, or AAA, weren’t far either from year-ago levels, signaling a calm market.
But a look at the futures markets for petroleum suggests this could be more like the calm before the storm, with crude prices rising 7% on the week.
And, quite literally, it is the storm season, with Idalia, the first major hurricane of this year, pummeling Florida with a surge of seawater on Wednesday that flooded neighborhoods along much of the state’s western coast, cut power and leveled trees.
But the damage inflicted by the Category 3 hurricane when it made landfall on Wednesday morning could have been far worse. By a stroke of meteorological good fortune, Idialia came ashore in a marshy and thinly populated part of Florida, southeast of Tallahassee.
Hurricanes often damage oil refineries, causing prices of fuels like gasoline to soar. Idalia was also an exception on this front, pulling it away from most Gulf of Mexico refineries. In fact, the net effect of the hurricane was actually negative to fuel prices.
In 2017, Hurricane Harvey triggered major refinery outages and brought enough damage to oil industry installations that forced some to close. More than 4 million barrels of refining capacity went offline temporarily from a refining capacity of some 18 million. Gasoline prices rose about 20 cents per gallon in the days
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