Ike's aftermath: The return of $4 gas-2009 Ram DOA

Chrysler just launched their new, big 2009 Dodge Ram truck, saying it is
vital for their survival. If any of the Macho Truck Crowd were thinking
that gas had gone back to stay "low" this should remind them that it was
only a pause before advancing. Two steps back and four steps forward.
Chrysler is done for.

Ike's aftermath: The return of $4 gas
http://tinyurl.com/5hfmzk

Gas prices poised to climb towards record levels again as hurricane hits
center of nation's oil refining base; Ike could also cost insurers up to
$18 billion.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: September 13, 2008: 4:45 PM EDT

NEW YORK (CNNMoney.com) -- Gas prices are poised to shoot back towards
record highs after Hurricane Ike's direct hit on the heart of the
nation's oil refinery base, analysts said.

In addition, Hurricane Ike could turn out to be the third-most expensive
natural disaster in U.S. history, according to preliminary forecasts
from a firm that does loss estimates for the insurance industry.

Experts say it's too soon to know exactly how bad the damage from the
hurricane, which slammed into Galveston, Texas early Saturday, will be
to refineries.

Some early reports suggested that damage to the refineries could be
limited despite the nearly direct hit.

But production at the refineries, which produce nearly a quarter of the
nation's gasoline, could still be affected if it takes weeks or months
to restore full power to the region.

The uncertainty has experts projecting everything from gasoline soaring
above $5 a gallon nationwide to an average price that remains just below
the $4 mark.
Gas prices already climbing

Many consumers throughout the Southeast have already started to see
sharp increases in gas prices before the storm even hit. The latest
nationwide daily survey by AAA conducted Friday showed prices up nearly
6 cents a gallon to $3.733.

Some markets, particularly in the Gulf Coast and South, have been hit
with a more than a 20 cent a gallon overnight increase. For example, the
price of gas jumped 27 cents in Knoxville, Tenn. to $3.924.

"This is a fear factor among station owners," said Kevin Kerr, editor of
Global Commodities Alert. "They're worried that they're not going to get
any more supply or if they do it's going to be a lot more expensive."

To that end, gas prices soared three years ago in the week after
Hurricane Katrina slammed into New Orleans. Prices jumped 17% to a then
record high of $3.0569 due to damage to refineries and pipelines.

In a statement to CNN, the Department of Energy said it "is very
concerned about the impact of gasoline prices on American families" and
encouraged people to report price gouging at its Web site.

The Department of Energy added that it is ready to release crude oil
from the Strategic Petroleum Reserve "when and where it is necessary to
ensure refineries are capable of maintaining operations" and that is
analyzing the amount of fuel production likely to be lost because of
Hurricane Ike and Hurricane Gustav, which hit near New Orleans on Sept. 1.

Kerr said the path of Hurricane Ike was the worst possible scenario.
There are about 20 refineries from Lake Charles, La., to Corpus Christi,
Texas. All of them saw winds and heavy rain from the storm. Together,
they have nearly 5 million barrels a day of refining capacity between them.

Almost half of that total capacity is concentrated in the
Houston-Galveston area, which is where the center of the storm hit.
Beyond refineries in the area, gasoline pipelines and other key
transportation infrastructure could limit the supply reaching consumers.

"We could see gas go up to $6 in certain states. I think the baseline
will be more like $4.50, maybe even $5," said Kerr.

The ExxonMobil (XOM, Fortune 500) refinery in Baytown, Texas, with a
daily capacity of 567,000 barrels, is the largest refinery in North
America. And the eye of the hurricane passed right over it.

CNN correspondent Ali Velshi reported Saturday morning that there was no
apparent damage to the refinery that could be seen from outside it,
despite extensive damage in Baytown.

Kevin Allexon, spokesman for ExxonMobil, said the company has yet to
determine if there is damage that could further disrupt operations.

"There's still some pretty significant weather that affects how safe it
is to do assessment work," he said.

Oil analyst Peter Beutel of Cameron Hanover said he's encouraged by
initial reports suggesting that crucial oil facilities in the region
survived without substantial damage. He's hopeful that if refineries can
resume near normal operations later this week, gas prices will remain
below record levels.

"Right now it looks like we took a licking and we kept on ticking,
although it's still early to get full reports," he said. "As of now, I
don't have reason to believe it's going to be a lasting factor. It
doesn't look like you'll get to $4 nationwide, but you'll see $4 gas in
a number of places," he said.

But Tom Kloza, the chief oil analyst for the Oil Price Information
Service, which provides the data for the AAA survey, said he's worried
about how long it will take to get full production going again.

"Even if we missed the worse of it, it's going to be a mess," he said.
"U.S. refineries are really dependent on local utilities. When you hear
them talking about power outages lasting for weeks, it's a worry."

The Department of Energy reported that 2.4 million customers were
without power as of Saturday morning, essentially everyone in the direct
path of the hurricane.

Kloza said fear of a political backlash could keep oil companies and
wholesalers from raising prices as high as the market might support in
the face of such a tight supply.

But he said that even if consumers are spared the full brunt of price
increases, they could end up dealing with limited supplies in some markets.

"You're going to see a lot of stations in some places that don't have
gasoline and you'll see some lines," he said. He's predicting nationwide
gasoline prices to rise to about $4 a gallon, give or take a dime for
the next month.

What's more, production at refineries along the Gulf Coast had yet to
return to normal since they shutdown in preparation for Hurricane
Gustav, even though the hurricane caused limited damage.

Kloza added that jet fuel, diesel and heating oil prices could sharply
increase -- partly because they don't get the public attention or
political scrutiny that gasoline prices do.
Ike cost may only lag Katrina and Andrew

But Hurricane Ike will prove to be costly even beyond the impact on gas
and other energy prices.

Catastrophe risk modeling firm AIR Worldwide Corporation said Saturday
that it estimated insured losses to onshore properties would be between
$8 billion and $12 billion. The firm said it expected significant wind
damage to skyscrapers in Houston as well as to mobile homes and warehouses.

And EQECAT, a firm that does catastrophe estimates for the insurance
industry, said its initial forecast for insured losses from Ike range
from $8 billion to $18 billion.

The low end of that estimate would make Ike the fifth most expensive
storm in history after adjusting earlier storms' costs for inflation.

But the high end of that forecast would put Ike behind only Hurricane
Katrina and Hurricane Andrew as the most expensive natural disasters in
U.S. history, according to the Insurance Information Institute.

Hurricane Katrina cost insurers an inflation-adjusted $43 billion, while
Hurricane Andrew, which hit South Florida in 1992, cost the industry an
inflation-adjusted $22.9 billion.

 

That is only a local shot term affect of a serious storm that stopped
fuel production temporarily.
Oil hit $100 on Friday, on it's quick drop to $80 or less.
Gasoline will be dropping as well, back to the 2007 prices.

 

Unrealistic expectation that gas would go back to '07 prices-too many
players on the world stage looking for product. The gas spikes up and
that is a sharp reminder to potential gas hog buyers, primarily the ego
truck buyers. Business truck buyers are just plain screwed.

 

Do you think maybe "Jim Higgins" has an agenda? Check all his posts
here since February ("his" first post here). I wonder who's funding him.

Bill Putney
(To reply by e-mail, replace the last letter of the alphabet in my
address with the letter 'x')

 

Global oil prices have fallen sharply. There is no way the world can
continue to support $150+/barrel prices indefinatly. It was a seriously
inflated price not warranted by demand nor stocks. The $5 diesel we saw
was a spike. We'll get there eventually, but I don't believe the time
is now.

 

Look at reality.

 

Blah blah, woof woof, whine whine, whimper whimper.... <KICK!!!>

Working trucks are a necessity. The new Dodge is the most advanced of
the lot, and offers the best possible efficiency in a working pickup
truck. You should be lambasting Toyota for building a whole factory
their behemoth-that-can't-actually-work poseur-truck for soccer moms to
tool around in. Where's their dually 3/4 ton version? Where's their
clean-burning diesel version like Dodge's Cummins Bluetec?

Get a grip. Building trucks is NECESSARY. Doing it in a technologically
advanced way with innovative features is a GOOD thing.

 

Not climbing here. Gas dropped another 5 cents today, down to $3.29
regular, $3.65 diesel. Thats back to January prices. Still about $.80
higher than last year at this time for diesel but still dropping despite
the dooms dayers.

 

Doesn't have to drop much more here to be back to December 2007 prices.
Already back to January 2008 prices at least here in AZ.

 

$4.199, give or take a few cents, in West Michigan-about 30-40 cents
more than it was per-Ike.

 

The stations I normally use are hovering at $3.59 right now, about 10
cents higher than pre-Ike. Of course I'm only 200 miles from Houston, so
the effects are more pronounced. A few stations ran out of fuel just
before the storm hit.

This morning's paper said that none of the key refineries sustained
significant damage, and they're in the process of coming back online
right now. Galveston and Houston have huge infrastructure damage and
power will be out in some areas for several more weeks (maybe months in
Galveston) but the refineries will be back at work within a week.

 

It NEVER ceases to amaze me at how quick the doomsayers kick into action
on these allegedly "dire circumstances"!

Gas prices have now stabilized at about $3.70 for regular unleaded, or
even a little less. Crude oil prices are falling, too, but it has been
noted that the oil companies are now somewhat recouping their losses on
the downside of things rather than on the upside--gas did not rise the
same percentage as crude oil prices did when they were "spiked".

These same doomsayers have not considered that the new 2009 Ram is more
aerodynamic than the truck it replaces. Or that the HEMI has been
upgraded and is more fuel efficient, too, plus MORE horsepower.

Increasingly, it seems, the media is being staffed by those who write
articles quickly to "get there first" rather than taking a little more
time to see what's all involved. The thought of researching what they
are writing about never seems to enter into the mix! They have seemed
to master "the authoritarian" approach to their articles to make it seem
like their information is infallible. In short, another article that
seems to push a particular agenda (i.e., "no trucks") and ends up doing
more harm than providing efficient and credible information.

Regards,

C-BODY

 

Yeah - and they act upset when they are referred to as the "hate
America" crowd, even though it is clear that all of their hopes and bets
are on failure whether the subject is Iraq or the economy.

Bill Putney
(To reply by e-mail, replace the last letter of the alphabet in my
address with the letter 'x')

 

Yeah - we're looking. Looks like you went away as fast as you came. If
you're reading this "Jim Higgins", tell George Soros to screw himself.

Bill Putney
(To reply by e-mail, replace the last letter of the alphabet in my
address with the letter 'x')