Rationing Gasoline as Market Manipulation?

Short-term rationing, targeted in the Southeast, is being promoted by John Hofmeister, former president for Shell Oil.

"America is suffering a lot more than is being reported," said Mr. Hofmeister, who is also chairman of the National Urban League. The economic slowdown may not be affecting the well-to-do, but it is "really nailing middle- and low-income people."


Oil industry blog, The Oil Drum, offers little hope for the current shortages in supplies for your local gas pumps:

"If the pattern in Louisiana holds in Texas, it may take as much as 20 days after Hurricane Ike before all of the production is back on line. It will certainly be at least 10 days. This would put full production at something between September 23 and October 3. Pipeline delays of up to 18 days could delay full distribution of petroleum products until something between the first and third week in October."

Nashville is already hard hit.

Oddly, reports of the destruction of 49 oil platforms in the Gulf by Hurricane Ike should have a less than minimal effect - they were producing less than 1% of the oil from the Gulf and were slated for shutdowns anyway.

Other reports focus on the overall decline in national demand for oil and falling prices --

"Regarding inventories, last week the market paid little mind to declines in U.S. crude, gasoline and distillates stockpiles as reported by the U.S. Energy Information Administration in their weekly statistics. However, the market did respond when the EIA also confirmed that demand in the United States is steadily shrinking, with gasoline demand now down 1.6 percent and total oil demand down 3.5 percent from last year.

Meanwhile, crude and other commodities' sharp falls have appeared to help bring about the collapse of the Ospraie Fund, a large commodity hedge fund, as a result of significant losses. The Ospraie Fund, whose assets peaked at $3.8 billion late last year, fell 27 percent in August due to bets on oil, natural gas and structured products, the Wall Street Journal reported. Any loss greater than 30 percent triggered a provision allowing investors in the fund to withdraw their cash."