US gasoline deficit seen at 30-mil bbl following Katrina

London (Platts)--6Sep2005

The US deficit following the aftermath of Hurricane Katrina could be
around 30-mil bbl as the country imports large volumes of oil products to plug
a supply gap following the storm, an oil analysts said Tuesday. 
      Crude futures in London and New York have shed over $3.50/bbl since
August 30 after a collective response by the International Energy Agency and
the US government to release emergency stocks of crude and products to combat
the spiralling cost of oil. 
     Front-month October Brent touched a record high of $68.89/bbl with WTI
for October delivery reaching a new record level of $70.85/bbl on August 30.
Unfortunately, demand for products in the wake of Hurricane Katrina has soared
and this has created huge shortfalls of refined products such as gasoline. 
     Barclays Capital has suggested that the gasoline deficit is as much as
25-mil bbl whilst Societe Generale said the deficit could be as much as 30-mil
bbl. 
    "It is a worldwide shock," Deborah White, analyst at Societe Generale said
in reference to the current energy crisis.
    Brent crude futures on London's International Petroleum Exchange are
drifting lower again Tuesday after another heavy day of selling on Friday and
Monday.
     At 1507GMT, the front-month October futures contract was trading down
9cts from overnight levels at $64.75/bbl. Since Friday last week, the crude
contract has shed over $2.60/bbl as the assurances of more oil supply appeared
to hit the market. 
     What is ironic is that despite pledges of products and crude, it appears
unlikely that much of this volume will ever hit the US market since tight
shipping markets make it almost impossible to find a suitable vessel, traders
said.
     The International Energy Agency has asked member states to release 2-mil
b/d, equal to 2.4% of world demand, from stocks for 30 days. The Paris-based
agency, founded in 1974 after the Arab oil embargo caused a surge in prices,
requires most members to hold emergency stocks for use during supply
disruptions.

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