Pump price to rise as refineries to shut for weeks

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-09-28T201732Z_01_N28647015_RTRIDST_0_HURRICANES-REFINING-CAPACITY-UPDATE-3.XML

WASHINGTON, Sept 28 (Reuters) - U.S. gasoline prices will rise in the near term because as much as 15 percent of U.S. oil refining capacity "could be out for at least another couple of weeks" due to Hurricanes Rita and Katrina, the government's top energy forecasting agency said on Wednesday.

The refinery outages amount to lost production of about 1.3 million barrels per day (bpd) for gasoline, over 700,000 bpd for distillate fuel and nearly 400,000 barrels bpd for jet fuel, the Energy Information Administration said in its weekly review of the oil market.

Water and wind damage to some of the refineries and the lack of electrical power supply to others is preventing the plants from immediately returning to service, the EIA said.

<snip>

The national retail price for regular unleaded gasoline increased slightly this week to $2.80 a gallon, below the record $3.07 after Hurricane Katrina hit the Louisiana coast on Aug. 29.

<snip>

"However, the longer these refineries remain shut down, the more serious the situation becomes, particularly with the heart of the winter season just a few months away," the agency said.

...more...

[pfitz59]

1. Starting already....

my local station is back over $3 a gallon! Lucky for me I can walk to work (store/beach/gym/etc). I pity the rural and exurb folks stuck on the fringes. You're gonna get shafted!

[YDogg]

2. My local (central FL) station went from $2.87 to $3.07 Overnight. n/t

[Skarbrowe]

7. That's pretty bad. I remember Orlando area used to keep lower for tourists

I'm not sure where you are in Central Florida, but I remember when I lived there that gas was always cheaper in Orlando than South Florida and someone told me that they tried to keep it down because of all the theme park visitors. That might have been a bunch of hooey. All I know is that it was at least 20 cents on the gallon less expensive than when I had to come back to the Ft. Lauderdale area every now and then.

[FloridaPat]

14. I worked up in Orlando for about a year and refused to buy gas there.

I live in Lakeland and it took 2 tankfulls a week for the commute. Orlando wa 10 cents more than Lakeland. At least in the Disney area and Maitland area.

[Skarbrowe]

16. Hmm, I did use a gas station a bit off the tourist track. Still lower than

it was in South Florida. I know if you tried to buy gas anywhere near I-4 or near the parks it would be a lot higher. The one I used in Williamsburg was always twenty cents or more, less than what I paid in Ft. Lauderdale. I guess I did do some searching for the one I used. It was in 2002 and I never paid more than $1.26 to $1.35 a gallon. Dang, those days are long gone.

[LostinVA]

12. MIne (Central VA) $2.89 to $3.10 over night

[DoYouEverWonder]

3. If they are going to build refineries in hurricane zones

You would think they could build them to withstand hurricanes? It's not like the oil companies aren't making enough money.

[rodeodance]

4. working people do not need this-truckers, etc. bad for them--bad for JR

[Bob3]

5. what happened to all those happy talk stories last week about

how the damage from Rita wasn't much and the impact was going to marginal and short lived? Oh they were bullshit? Okay then. Carry on.

[54anickel]

11. Were they? Or is this bullshit. For 2 weeks in a row now gasoline

inventories have been UP, while the forecasts called for them to be down. They need to chew up the surplus before the public catches on to their own little "cartel".

[LostinVA]

13. Yesterday, AAA said gas prices would be going DOWN now

And I trust them alot more than the oil companies.... this is NOT price gouging, this is profiteering, a much worse crime legally and ethically.

[Strelnikov_]

15. 100% Petroleum, 80% Nat Gas Production From GOM Offline

http://www.mms.gov/ooc/press/2005/press0928.htm

10% of nations refining capacity offline, 5% for months, in a system that had little spare capacity.

Henry Hub, along with many other, natural gas processing facilities flooded. Most have not even been accessible to evaluate for damage.

So, yes, the happy talk was the product of the first rate media we have in this country. Our non-redundant energy infrastructure is about to hang us out to dry.

[3waygeek]

6. Shell station near my house

in Duluth, GA went from $2.699 this AM to $2.899 at 4 PM.

[lovuian]

8. The Oil crunch has begun!!! Somehow I don't see it get any

better for awhile!!!

[Strelnikov_]

9. Gulf Gas Outages Persist, Raising Concerns

Like I said, 'The Winter Of Our Discontent' is coming.

http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=704&feed=dji§ion=news&news_id=dji-00112120050928&date=20050928&alias=/alias/money/cm/nw


One hundred percent of oil production in the region, or 1.5 million barrels a day, remained off line, the MMS said. Suspended natural gas volumes actually worsened, with 8.02 billion cubic feet a day of natural gas shut in, or 80% of total gas production, up from 78.56% on Tuesday. Delays in restoring production are having a sharp impact on the natural gas market, where traders are concerned persistent outages will eat into inventories needed for the winter, when demand significantly exceeds supply.

The supply gap yawns so widely that some traders are saying prices will have to rise much higher to destroy enough demand to balance the market. "You're just not building storage," says George Speicher, a gas futures trader at Dow Inc. "I don't care how much demand destruction there is if 75% of the gas is down in the Gulf."

[Strelnikov_]

10. White House Moves To Prevent Run On Petrol Supplies

The Financial Times
September 28 2005

http://news.ft.com/cms/s/91981572-3047-11da-ba9f-00000e2511c8.html

“The president's best bet for the next two weeks is to try to see if he can get Americans to stop doing discretionary driving without creating panic,” said Amy Myers Jaffe, research fellow at the James A Baker III Institute for Public Policy. “He's in a very challenging position.”

. . .

“The storms and the resulting price rises have created a sense of anger with consumers and urgency with politicians,” said Robin West, chairman of PFC Energy, the consultancy. Congressmen say constituents are more concerned by rising fuel prices than the war in Iraq or the president's handling of Hurricane Katrina. And analysts fear prices for many fuels are set to climb higher.

The storm cost the US about 5 per cent of US refining capacity, even as another 5 per cent remained offline following Hurricane Katrina. Perhaps more importantly in the short term, however, is the immediate burden placed on the system by last week's massive evacuation of Texas and Louisiana.

[Mugsy]

17. Oil price up 33% but gas prices up 74%???

On ABC News last night, they compared the 147% increase in the price of Natural Gas over the past year to the increase in oil (33%) and Gasoline (74%) prices... and I wondered aloud:

If oil prices have increased only 33%, why have gasoline prices increased 74%???

The answer, of course, is the lack of refineries.

PROOF POSITIVE that high gasoline prices aren't a direct result of oil shortages. What will finally wake people up to the fact that the shortage is man made specifically for the purpose of driving up gas prices?

Gas prices could easilly be cut IN HALF if the government forced oil companies to build new refineries. But this Administration will NEVER do that.