Zeev's Turnips Patch-No Politics (ZEEV)

[osprey]

Oil is in the low 60's/barrel. But refinery capacity was knife edged and now 6 or so refineries are off line and others on reduced run rates. Plus, the Gulf of Mexico production is impacted and that is not going to come back soon. Some of it may never come back since the production platforms just plain sank. I can see a short term, "it could have been worse" rally (and it could have been) but for the next year, petroleum is going to be tight no matter what.

In California, gas is $3, Natural gas for heating is going up 40%, electricity 12%. I assume it is similar around the US. In colder climates, it is going to be a long winter for those who have little extra income for higher utilities. That zero savings rate and all that.