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Crude futures hit a 2-week low Thursday as the damage wrought by Hurricane Isaac on oil and gas facilities in the Gulf was not as bad as feared.
"We were lucky. I think we really dodged a bullet," says Andrew Lebow, senior VP of energy futures at Jefferies Bache.
With crude stocks 30 million barrels above the average of the past four years, Lebow believes the recent run-up ahead of Isaac could mark a near-term peak for West Texas Intermediate (. The U.S. benchmark will likely settle into a $90 to $100 range "with a bias to the downside," he says.
[Related: Gas Prices Will Continue to Rise Until U.S. Builds More Refineries: GasBuddy Analyst]
While that will result in some relief at the pump — between 5 and 10 cents per gallon — Lebow notes gasoline supplies are "on the low end." Given planned downtime, i.e. "turnarounds" — at refineries both here and in Europe, "I'm not sure we'll see all that much relief [at the pump] so quickly," he says.
There's one big caveat to Lebow's generally bearish view on crude prices: The potential for Israel to launch an attack on Iran's nuclear facilities, either unilaterally or with U.S. support.
[Related: The Looming Threat to Gas Prices: Strait of Hormuz Explained]
The "geopolitical premium" is adding $5 to $10 per barrel to the price of crude -- "sometimes more, sometimes less," he says. That's a big reason why "this market will stay relatively steady" despite the global economic slowdown, he says.
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