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With the national average price of gasoline at $3.80, a rapid recovery from Hurricane Isaac cannot come soon enough to the refineries and offshore oil rigs that were shuttered.
Seven states plus Washington DC have had average prices north of $4 per gallon for too long. New York City's $4.05 average price and Los Angeles' $4.14 look like relatives bargains compared to Chicago's $4.33 average today, but it looks like lower prices will be coming soon.
According to the Houston Chronicle most of the offshore oil and gas crews evacuated from the Gulf of Mexico ahead of Hurricane Isaac are back on the job, and the storm appears to have caused only minor damage to rigs and platforms, according to the initial federal reports.
More than 800,000 barrels, or about 58 percent, of daily oil production in the Gulf remains offline, the Bureau of Safety and Environmental Enforcement said Monday. About 1.7 billion cubic feet, or 39 percent, of daily natural gas production in the Gulf is still shut in.
That’s a significant improvement since last week, when as much as 95 percent of oil production and 72 percent of natural gas production went off line as Isaac barrelled down on the region.
Six rigs and 71 production platforms remain evacuated, less than 8 percent of the rig fleet and about 12 percent of the platforms stationed in the Gulf.
This past weekend marked only the second time in the past 12 years that the nation's average price of gasoline increased from from the start of Labor Day Weekend to the end. On Friday the national average was $3.804 and yesterday it was $3.805, an increase of one-tenth of a cent. The nominal increase may be an indicator of better news ahead.
Undoubtedly, the return of refining operations in the gulf will enable supply to ease and gasoline prices to decline.
Of the 11 Gulf Coast refineries affected by Isaac-related flooding and power outages, one has returned to normal operation and nine others are restarting or operating at reduced rates, the U.S. Department of Energy reported yesterday. Only Phillips 66’s refinery in Belle Chasse, La. remains shut down, with a capacity of 247,000 barrels per day.
The Gulf of Mexico is home to about 23 percent of the United States’ crude oil production. About 43 percent of the nation’s refining capacity is stationed along the Texas and Louisiana Gulf coasts. We wish them Godspeed to full recovery.