No One Really Knows What Will Happen Now

At the moment this is an All American crisis. You might think that it (Katrina)was a significant event, but you're missing the point. It was a Significant Oil Event.

America is currently consuming its own emergency reserves.

The good news is there is a pattern of oil consumption which predicts a dip in consumption before winter, where a different type of oil is used that is easier to refine.

The bad news is, it probably doesn't matter much because there's simply not enough oil to meet demand, in the US and elsewhere.

In the northern hemisphere, there is one thing we can anticipate. Autumn is coming, and after that, winter. If you can't read between the lines, here it is in bold:
Things are about to change.

Robert W. Dalton.in the New York Times:

Some relief might come from more imports of gasoline from Europe. The Environmental Protection Agency relaxed pollution standards nationwide to allow the use of lower grades of gasoline. Earlier the agency had relaxed standards in the four states most affected by Hurricane Katrina: Florida, Alabama, Mississippi and Louisiana.

Industry experts expect suppliers from Europe to help fill the gap. But it will not happen overnight. "The United States is the highest-price market in the world right now, and that will attract European products in large flows," said Lawrence J. Goldstein, president of the Petroleum Industry Research Foundation. "That's undeniable. Price is the magnet."

"But we have a liquidity crisis," he added. "We need to create supply instantaneously."

Much of the problem with gasoline supplies is psychological, for consumers as well as investors.
Markets were initially calmed by reports that one large pipeline concern, Kinder Morgan had indicated that its Plantation pipeline, running from New Orleans to the East Coast, was undamaged and expected to resume operating by Tuesday.

Then, Kinder Morgan unexpectedly pushed back the start-up date for the pipeline, which is capable of 620,000 barrels a day, to yesterday. Then it said there was no clear resumption date.

Some energy industry strategists were adamant that market forces would prevent gasoline lines from forming. Others were not so sure.

"I hate to be an alarmist, but we're in a situation without much precedent," said David Pursell, a principal with Pickering Energy Partners in Houston. "With the gasoline market as tight as it is, people complain about $3 gas but they'll put $5 gas in their car if they suddenly think it's not available."

Robert W. Dalton, in Spartanburg, S.C.; Brenda Goodman, in Atlanta; and Vikas Bajaj, in New York, contributed reporting for this article.
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