The pace at which petroleum markets in the Northeast normalize in the wake of Hurricane Sandy injects additional uncertainty into this month's forecast. Price effects from the storm have been thus far fairly muted. Several regulatory waivers have been issued to ease supply constraints in the Northeast, helping mitigate some price pressures. However, the situation continues to develop and gasoline inventories in the Northeast are currently at relatively low levels; if supply disruptions linger longer than current expectations, it could push prices in the region higher. Currently, EIA is projecting prices on the East Coast (PADD 1) to average $3.43 per gallon in December, a decrease of 30 cents per gallon from October, which is slightly less than the 33-cent-per-gallon decline projected for the U.S. average price.
The Market Prices and Uncertainty Report that accompanies the November STEO provides a quantitative analysis of gasoline price uncertainty based on the price structure of futures and options traded for New York Harbor Reformulated Blendstock for Oxygenate Blending (RBOB).