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 Sept-Nov is a low demand period as we are between gas and heat seasons.  A refining system well stretched in summer/winter catches it's breath and stockpiles for winter.  That's probably the main effect as to why margins are dropping like a stone, esp. on mogas.  There is enough slack in the system in this period to cover for the 4 downed refineries. (the biggest is back)

NO + the surrounding areas are only about 2 million people.  That's less than 1% of US population.  We've already seen many of them were too poor to have cars and use much fuel.  Also just because people were displaced doesn't mean less driving a priori.  Where ever they went, they'll still be driving once they find work.

As for real problems in winter, I doubt it unless we have a terrible winter (which always causes price spikes).  We had 131 million bbls of heat in storage when Katrina hit.  That was what we had in Dec the year before.  Mogas season had been good and margins stayed up on heat as well so refiners made lots both as a byproduct of mogas production and just because they could hedge in a nice margin.  Nat Gas is more worrisome although stocks there are reaching reasonable levels again.

by HiD on Tue Nov 22nd, 2005 at 02:39:41 PM EST
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