Eric Bolling Puts Gustav in Perspective
Hurricane Katrina was a nasty storm...and Gustav is far tamer. Crude oil and natural gas prices are already retreating.
Eric Bolling broke down the ramifications earlier today on Fox Business Network:
“We talked to FEMA and the Coast Guard and Transocean rig driller, and we’ve listened to Governor Jindal and the sense you get is that we kind of avoided a disaster. And traders are really telling us that, with oil down almost $5 a barrel. We’re wondering, is this just a fluke? No.”
“Yes, Gustav had 115 mile per hour winds when it hit but not the 175 mph we saw with Katrina. Yes, the storm did rip through the important production areas of the Gulf. But it didn’t spend a lot of time there the way Katrina spent a lot of time. It went through around 17, 18 miles per hour –that’s pretty fast. It did go into some important areas of production and refining but it feels like we missed it. A lot of the damaging winds are on the Northeasterly side of the hurricane and it went a little too far north and east to affect some of the major infrastructure. We’re pretty fortunate right now.” Bolling on FBN
On the oil infrastructure:
“There still could be flooding and yes, there could still be human tolls but the oil infrastructure seems to have held its own during this storm, versus nowhere near this type of scenario three years ago almost to the day with Hurricane Katrina.”
On gasoline futures being down the same as oil:
“That’s the important thing, if the refineries stay shut. When gasoline is down as much as oil, it basically tells you that everyone in the industry who are trading, and most of the big oil companies trade, a lot of the big countries trade, they believe that this is not going to be a significant refinery event either. Otherwise, gasoline would go down but maybe not as much as oil.”
On the Golden Triangle of refineries:
“In the Golden Triangle – the Port Arthur, Houston, Beaumont area – we’ve just spoken to people who said they’re not really shut down. Some of them have. That’s a safety precaution. If you remember back in Hurricane Katrina, some of them were shut for literally months after the hurricane went through. This feels more like a daily event, day-to-day versus Hurricane Katrina being massively bigger.”
On what the market is telling us:
“The market is sounding the all-clear, otherwise we would have what we call the crack spread, the margin of profit on a barrel of gasoline being higher. It’s not. It’s actually falling with the price of crude oil.”
On market action in energy today:
The volume is very light. We’re doing less than 100,00 contracts so far. Normally on a typical day we do well over a million, over 1.1 million.
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