RBOB Gasoline futures tumbled to their lowest level in almost a week overnnight as several US Gulf Coast refineries reported their plans to restart operations after the devastation of Hurricane Harvey forced them to shutdown.

While about one-fifth of U.S. refining capacity is halted, according to data compiled by Bloomberg, some plants including those operated by Citgo Petroleum Corp. and Marathon Petroleum Corp. are preparing to restart.

The Oct ’17 contract was down as much as 4% earlier before a modest bounce.

Moreover, compared to the squeeze in the September contract, RBOB prices have really tumbled…

Of course, this rather spoils Janet Yellen’s transitory hopes for a burst of inflation to help her case when she next raises rates and while concerns had risen that higher gas prices could derail the Trump economy, it appears those risks are overblown.  

Stephen Moore, a fellow at the Heritage Foundation and former Trump transition energy adviser, said “the negative effect will be not pretty.”

“We’re talking about maybe knocking half a percent, or one percent, off GDP for a quarter or two, higher gas prices for sure, because Houston is the energy capital of the country. … So all those things are negative.”

Moore said he follows a rule of thumb that every penny increase in commercial gasoline prices takes $1 billion to $2 billion out of the economy from consumers.

That means that as prices rise after Harvey, the economy could be hit even harder, including from lost economic production in Houston — the country’s fourth biggest city — and the spending needed for a major federal recovery effort.

“It’s a question of how much the prices are already starting to rise,” he said. “I don’t know how fast this industry can recover … Could we see gas prices over $3? Potentially. That would be a big hit to consumer finances.”

A disrupted economy, driven in part by stout gasoline prices, could undercut one of President Trump’s most resonant messages with voters.