Both on-highway diesel and gasoline prices rose this week, according to the U.S. Energy Information Administration’s (EIA) pricing report released today.
But concerns expressed before Hurricane Isaac hit the Gulf Coast last week over how greatly the big lumbering storm would damage fuel production and thus impact fuel prices appear to have abated.
Per an IndustryWeek report posted after Isaac made landfall, Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst and Young, stated that “Oil supply concerns arising from damage to facilities in the U.S. Gulf from Hurricane Isaac proved unfounded and depressed prices, ….Most of the production facilities were shut down in advance of the storm, but early reports indicated fairly limited supply disruptions, thus taking some of the pressure off prices."
“Planned shutdowns ahead of a storm is pretty much standard procedure,” Denton Cinquegrana, executive editor for the Oil Price Information Service (OPIS), told FleetOwner. He advised that it appears “so far” that “there has been little to no damage to Gulf of Mexico oil production [from Isaac].
“It might be a tad early to sound the all-clear bell on refineries though,” Cinquegrana noted. “For example, the Phillips 66 Alliance refinery has some flooding to contend with and loss of power. Valero said that at its refineries there was no significant damage. So I think [refinery] issues, if any, will likely be sporadic.
The fact that the supply disruptions are fairly limited and so are taking upward pressure off prices [indicates] that they are not significant supply disruptions,” he continued.
Regardless of any refinery disruptions, Cinquegrana expects the “impact on prices is going to be short-lived mostly. The run-up [in prices] seen over the several days [after Isaac hit] were a function of expectations of supply disruptions; distributers paying up to secure supply; and strengthened demand from people filling up and ‘getting out of Dodge.’”
To be sure, fuel prices are up this week. Per EIA, for the week of Sept. 3rd, the national average for a gallon of on-highway diesel stands at $4.127—up 38 cents from a week ago. Gasoline has risen even more sharply— up 67 cents-- to $3.843 nationally.
Diesel prices are up in every region, with California taking the biggest hit. The average price in the Golden State is now $4.493— that’s a whopping 84-cent jump from a week ago.
The price of diesel rose the least in the Midwest, where the average now is $4.072—“just” 22 cents higher than a week ago.
And on the hard-hit Gulf Coast, the average diesel price rose relatively modestly, all things considered, to $4.026— 45 cents higher than just before Isaac came on the scene.