Gasoline up 50 cents in past 2 weeks - why???

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In our area the gasoline has gone up 50 cents in 2 weeks - What the H*** is going on??? Any one know?

-- Anonymous, August 24, 2001

Answers

Probably just a local supply situation. Here in NJ the price has been dropping over the last few weeks and regular is now about $1.35 per gallon. Also, there hasn't been any real change in crude oil prices.

-- Anonymous, August 24, 2001

I get emails from a friend at XXXX Co. and this was one I got today. Are you in the area(s) mentioned? *******************************************************

"Energy News Gasoline Surges as Midwest Refinery Shutdown Spurs Supply Worry By Mark Shenk - 08/24 11:47

New York, Aug. 24 (Bloomberg) -- Gasoline rose almost 4 percent on expectations that the shutdown of a refinery near Chicago will strain supplies for the rest of the year. Citgo Petroleum Corp. said its 160,000-barrel-a-day refinery in Lemont, Illinois, will be closed for five to six months because of damage from a fire last week. Rising wholesale prices in the Midwest are luring gasoline from other regions at a time when demand for the fuel is stronger than normal.

"Gasoline is taking off and it's definitely due to the Chicago issue," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. "You are starting to see trucks bring gasoline to the Chicago region from places like Pittsburgh, and barges from the Gulf Coast" will also arrive.

Gasoline for September delivery rose as much as 2.96 cents, or 3.8 percent, to 81.9 cents a gallon on the New York Mercantile Exchange. Prices have climbed 11 percent this week, the biggest weekly gain since last October.

Gasoline futures, which represent wholesale prices, are down 14 percent from this time last year.

"There will be a ripple effect felt as far away as Europe as cargoes get sent to New York to replace cargoes that are now going to the Midwest from the Gulf Coast," Silliere said.

The Chicago and Milwaukee regions require cleaner-burning gasoline using ethanol, a corn-based additive available mostly in the Midwest. A supply shortfall in June 2000 caused by a pipeline shutdown sent retail prices to records.

Pain at The Pump

Average Chicago retail gasoline rose 2.4 cents to $1.714 a gallon yesterday, the American Automobile Association said today on its Web site.

The price has risen 26.6 percent over the past month. The national average gasoline price was $1.442 a gallon, down from a record $1.718 in May and down 16.2 cents from this time last year, according to AAA figures.

"I thought if (the refinery) were going to be down for a while, prices might rise a dime, and what I am hearing is that they are up 24 cents," said Phil Flynn, vice president and senior market analyst at Alaron Trading Corp. in Chicago. "This just goes to show how strong the demand for gasoline is."

Wholesale prices in Chicago yesterday were 33 cents a gallon above the futures market price, up from 7.5 cents the day before the Citgo fire, according to Bloomberg Energy Service. U.S. demand reached 10 million barrels a day last week, just below 10.1 million in late June, the highest level in at least 22 years, according to figures in a report Tuesday from the American petroleum Institute.

Crude oil for October delivery rose as much as 36 cents, or 1.4 percent, to $26.99 a barrel on the Nymex. Prices are up 5.4 percent this week.

In London, Brent crude oil for October settlement rose as much as 40 cents, or 1.6 percent, to $26 a barrel on the International Petroleum Exchange.

The IPE will be closed on Monday for a bank holiday."

-- Anonymous, August 24, 2001


Well I live in Iowa, so I don't know where we get our fuel from. I had thought it came out of the OK area, but I could be totally wrong (and probably am).

-- Anonymous, August 24, 2001

Found the answer. The DM Register finally had an article about it. Looks like it is a mess for the midwest for a while.

Gas price increases to $1.70 Consumers are paying more at the pump because of shutdowns at Midwest refineries. By WILLIAM RYBERG Register Business Writer 08/25/2001

---------------------------------------------------------------------- ---------- Gasoline prices jumped near $1.70 a gallon at many Iowa gas pumps Friday and could go higher as the Midwest deals with tight supplies because of refinery shutdowns.

The prices are up nearly 50 cents from early August, when motorists paid around $1.23 a gallon for unleaded regular.

David Downing, an energy data analyst for the Iowa Department of Natural Resources, said he couldn't rule out $2 gasoline, although he expects prices to peak around $1.75 a gallon. June was the last time Iowa pump prices were that high.

Prices should reach their high in the next two weeks and then moderate as demand falls off after the Labor Day weekend, Downing said.

Unleaded regular was selling Friday for $1.71 a gallon at several gas stations and convenience stores in Des Moines and around the state, Downing said.

The Midwest gas crunch has pushed Iowa's prices above the national average of $1.44 a gallon on Friday, according to AAA motor club. Iowa isn't alone. Chicago motorists were paying $1.71 Friday, and Milwaukee pump prices were $1.68 a gallon.

Oil companies are in a bidding war for supplies, tight because four refineries in the Midwest have or will shut down, said Ron Marr, executive vice president of the Petroleum Marketers and Convenience Stores of Iowa.

The main culprit for higher prices is a fire that shut down a Citgo Petroleum Corp. refinery near Chicago on Aug. 14.

Citgo has been buying gasoline from other refiners to make up for lost production, pushing up wholesale prices in the Chicago area and throughout the Midwest, including Iowa.

Also occurring: A power outage damaged an Oklahoma refinery on Thursday, and at least two Minneapolis area refineries must shut down in September for required routine maintenance, Marr said.

"You've got a heck of a mess that's just brewed," Marr said.

Iowa supplies should remain adequate, Marr said.

Refinery problems can lead to price spikes because of the delicate balance between demand and the production capacity of the nation's refineries, Downing and Marr say.

In times of high demand, such as now, domestic refining capacity can't provide all the gasoline the nation needs, and supplies must be bolstered by imports. A problem in the production and delivery system can quickly push up prices.

Delayed vacations may be helping to sustain high late-summer demand, Downing said.

Seeking relief HELP REQUESTED: Citgo Petroleum Corp. has contacted the U.S. Environmental Protection Agency and the U.S. Department of Energy to determine whether the agencies can help ease gasoline supply concerns in the Midwest, especially in Chicago and Milwaukee.

RELAXED RULES? Citgo and the EPA wouldn't discuss what the EPA might be able to do. Both Milwaukee and Chicago are required by law to burn ethanol-blended gasoline to decrease air pollution. The EPA wouldn't say Friday whether options might include a temporary relaxation of the requirement.

BLENDED FUELS: The ethanol is blended with the gasoline when the gas is pumped into delivery tanker trucks at fuel terminals.

-- Anonymous, August 25, 2001


I hadn't noticed any increases down here in S. Fla.

-- Anonymous, August 25, 2001


Whoops, on the way home tonight I noticed our prices are now down to $1.25 per gallon. Dropped even more during the last few days. Yup.

-- Anonymous, August 25, 2001

Why do I feel that the oil companies are shafting the midwest again?? Is it because no one important lives here? Or maybe we don't b*tch loud enough like those in CA and NY would? Sorry just pissed that I am paying $1.80 for gas right now.

-- Anonymous, August 26, 2001

Bargain gasoline prices come from areas that have a lot of refineries *and* easy access to the crude oil needed for that. My own area on the East Coast has lots of docks for the tankers to pull up to. How many docks are in the midwest? Cheer up, you get corn and wheat at lower prices than I do, so that will balance it all out, OK?

-- Anonymous, August 26, 2001

Beckie, I was wondering the same thing. Last week, reg. gas was averaging around $1.37 (slightly cheaper for off brands). After reading this thread, I took note of the prices: around $1.61 for regular (name brands). I don't see $1.80 gas, yet, but if you have it, I'll bet it won't be long before our prices go up again, too.

Thing is, the prices here for gas traditionally go up around the Labor Day weekend and then drop back. I generally make it a point to fill up the week before and fill up a 10 gal container to carry me through the holiday period.

-- Anonymous, August 26, 2001


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