Ben Bernanke Jackson Hole speech may overshadow news coming from the aftermath Hurricane Isaac yet it is in Russia's it is America's new shale gas revolution that is shaking things up.

Fed Chairman Ben Bernanke can make or break the oil market today. The market had ben backing off on expectations that Mr. Bernanke would signal QE3d at this historic gathering yet recently the Fed Chairman. Yet while the market has been downplaying those hopes recent speeches by Mr. Bernanke seem to go against the expectations leading into the talk. I think we might see been signal a bit more of an aggressive policy as we move forward.

Of Course Mr. Bernanke's job is on the line. If Mr. Bernanke sees the economy faltering it would increase the odds that Mitt Romney would become President. Of course if Mr. Romney is elected than Ben would no longer Fed Chairman. Interesting decision don't you think?

Power outages and Flooding may slow Louisiana and other parts of the South getting back to normal. This is also true of the US energy industry. Phillips 66 said there was "some flooding" at the Alliance refinery in Belle Chasse, Louisiana. The U.S. Bureau of Safety and Environmental Enforcement said 94.99 percent of oil and 72.52 percent of natural gas production was disrupted by the hurricane in the Gulf. Reuters News Reported that Companies including Royal Dutch Shell and Anadarko said they could begin restaffing and restarting shut-in offshore production platforms as early as Friday. As of Thursday, 95 percent of oil production and 73 percent of natural gas production in the offshore Gulf of Mexico remained shut, U.S. government figures showed. Around 936,500 barrels per day (bpd), or 5.5 percent, of total U.S. refining capacity was still idle. It will likely take several days or a week to restore around 1.3 million barrels per day (bpd) of offshore oil output and 3.2 billion cubic feet per day of natural gas production that is shut in, experts said. Refineries are also expected to restart gradually.

Bloomberg reports that Marathon Petroleum Corp.'s Garyville refinery in Louisiana will stay at reduced rates until normal crude supply logistics return, Shane Pochard, a spokesman for the company, said in an e-mail. The refinery didn't sustain significant damage from Hurricane Isaac, he said.

Remember back when Russia in a pay dispute with Gazprom back in January 2006 cut left Europe feeling vulnerable to the whims of Russia that could soon just cut off gas supply in the middle of winter. Then came Belarus when Russia cut them off over a pay dispute... Remember when it was proposed by Iran that Russia the UAE and Iran form a natural gas cartel to try to wield its influence over price and supply not to mention the implied threat against Europe to be left out in the cold. Well forget those fears. Russia no longer is feeling all powerful about natural gas mainly because of the Shale Gas Revolution in the United States.

The Energy Expert Center reports that "Russia's economic development ministry: "Shale gas revolution" in the United States will make it even more problematic for Gazprom to sell gas in Europe EU gas Gazprom shale gas USA For the first time ever the Russian authorities have admitted that Gazprom may have problems with selling gas in Europe. According to Market Leader, they in Russia's Economic Development Ministry believe that in the face of the "shale revolution" in the United States and some other countries Gazprom needs to find ways to make its investments more efficient. They in the Ministry say that the developing shale gas production in the United States and the growing number of spot contracts on the market may prevent Gazprom from keeping its prices high. In a letter released after a meeting in August the Ministry mentions as decisive the year 2016 - the time when the United States will finish building terminals for exporting cheap shale gas. Gazprom may also face internal problems, like rising domestic gas prices and growing tax burden.

Today the monopoly is urging the Government to ease the burden. The final decision on the rise in the mineral production tax is supposed to be passed this autumn. Gazprom and its supervisors from the Energy Ministry have already told the Government that the rise is contrary to the WTO's rules as it will prevent the monopoly from selling its gas at a sufficient profit. They in the Government believe that Gazprom must find ways to improve the efficiency of its investments or it may stop being competitive on both domestic and foreign markets. The key risks for Gazprom, according to the Economic Development Ministry, are as follows: in 2011 exports made for almost 75% of Gazprom's income, with the greater part of the gas supplied under long-term contracts, whose costs are linked to oil product prices with a 6-9 month lag.

Now that the demand for liquefied gas is on the rise, the pressure on Gazprom in Europe is growing. Today the gas price on the spot market is $320 per 1,000 c m, while the gas sold by Gazprom under its long-term contracts costs as much as $400-450 per 1,000 c m. As a result, the share of Gazprom on the European market is shrinking, which may lead to reduced exports in the long-term future.

Now that the shale gas production in the United States is growing, gas in that country costs just $110 per 1,000 c m. Experts believe that the United States may start exporting gas in 2016, which means that the gas prices on the European market will get even lower. The first gas export terminals will appear in the US and Canada in 2015, with more terminals to be opened in 2016-2017. Canada is going to export 40bln c m of gas a year to South-East Asia and Japan.

In 2011 the share of independent gas suppliers on the Russian market grew to 25% due to optimized gas production costs and more aggressive marketing policies. In the meantime, Gazprom's capital and operating costs are growing, which is leading to declining efficiency and lower competitiveness."

The truth is that more gas means that Europe won't be held hostage to a hostile Russia. Plus very bearish for gas as new pipelines are opening to move even more gas soon.

The AFP is giving oil boost by reporting that German Chancellor Angela Merkel has urged Israeli Prime Minister Benjamin Netanyahu not to order a military strike against Iranian nuclear sites, the newspaper Haaretz reported Friday. The article, citing an Israeli official on condition of anonymity, said Merkel had called Netanyahu 10 days ago amid a wave of reports of an imminent Israeli attack, to give a "clear message as to her opposition" to such action. Merkel urged Netanyahu to "give more time for sanctions and diplomacy to work," and warned of the consequences of such an attack for security in the Middle East.

Of course such a warning may lead to speculation that Israel is ready to attack. That comes the day after Bloomberg News reported that Iran maintained its output of enriched uranium that world powers say may eventually be used for nuclear weapons and doubled enrichment capacity at a mountainside facility, according to the International Atomic Energy Agency./ Iran's stockpile of medium-enriched uranium grew 31 percent to 189.4 kilograms (417.6 pounds) from 145 kilograms in May, the IAEA said today in an 11-page restricted report. The Persian Gulf country had raised production of the 20 percent enriched material by a third in the three-month period ending May 25. "The agency is unable to provide credible assurance about the absence of undeclared nuclear material and activities in Iran, and therefore to conclude that all nuclear material in Iran is in peaceful activities, according to the report.

IMF Comments Are Getting oil going! IMF Lipton says Draghi had right approach!

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Phil Flynn