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Despite Hurricane Isaac bearing down on the Gulf, crude oil prices have remained mostly flat for the past week.Energy markets guru Stephen Schork believes that’s because the storm is not expected to cause the same level of damage as Hurricane Katrina.
But Isaac is not the only phenomenon American energy markets are contending with.
A fire at the Amuay refinery in Venezuela — part of the second-largest energy complex in the world — continues to rage, and Schork tells us no one’s sure when it will be extinguished.
As a result, the country has been trying to secure processed gasoline from U.S. refineries — the same refineries that are being shut-in because of Isaac.
This has caused end-market gasoline prices to rise up to 50 cents a gallon, Schork said.
“Should Isaac generate any extended delay (e.g. power outages, storm surge) in Gulf of Mexico refinery re-starts, then the template is set for a further disconnect in product prices… and further pain for motorists, ” he wrote in his latest report.
As long as the fire continues, this perfect storm will continue to send pump prices surging, he said.