Joined: Oct 23, 2004 Posts: 5923 Location: New Jersey
Posted: Mon Mar 26, 2007 6:21 pm Post subject: Another Gasoline Record
Another Gasoline Record
Since the rising, and possibly record price, of gasoline later this year may be of special interest, per the suggestion of poster strider3700, I'm starting another thread – separate from the "Another Record" thread. International comments are welcome.
The price of gasoline rocketed ahead another 7 cents today in May NY futures trading, after gaining 3 cents Friday. Los Angeles cash wholesale prices soared 17 cents after moving swiftly up 8 cents Friday (possibly due to weather probelms slowing shipments of oil from Alaska).
What gives? A series of refining problems, and the 44th and 45th US refinery incidents this year are helping push the price of gasoline up much faster than the rising price of oil would indicate.
This comes against the background of strongly growing US oil/product demand in 2007. The rate of oil/product demand growth in the first ten weeks exceeded the rate of industrial production growth. So even adjusting for other factors implied in the industrial production index (like increased energy usage in the utilities component, and population growth in the consumer component), it still looks like the US has become less energy efficient. Granted, it's not clear beyond all doubt whether this is a temporary thing, caused by fuel changeovers (to ethanol blended gasoline and ultra low sulfur diesel), or a sign of declining long term energy efficiency. This should be clearer by the Fall, when we've had more than one year usage of the new gasoline and diesel standards.
Until then, it may be up, up, and away according to some:
Quote:
Showdown With Iran Could Send Gas to $4-to-$5 a Gallon
Brian Hicks, president of Wealth Daily, told CNBC’s “Morning Call” that a confrontation with Iran would boost the price of gasoline to $4-to-$5 a gallon at the pump “in a heartbeat.”
But he thinks such a confrontation is unlikely and Iran’s recent seizure of 15 British sailors will be resolved through negotiation.
“Iran knows it sits in the catbird seat,” Hicks said Monday. “I don’t know that they’ll use oil as a weapon directly, but they do know they have a lot of leverage. They know they can push the West to a certain point and they also know the West will be willing to go only so far.”
He said the political situation in Iran and the Middle East won’t calm down any time soon, but Iran understands that it must sell its oil at a reasonable price to maintain stability at home.
Stephen Bailey, senior vice president at Frontier Strategy Group, said Iran lacks refining capacity and imports about 40% of its gasoline. This creates internal pressure to keep supplies plentiful and prices low.
Bailey said he believed Ayatollah Ali Khamene “will probably counsel against further provocative actions such as holding oil off the market.”
A barrel of oil on the New York Mercantile Exchange recently traded at $62.91, up 63 cents. The price peaked last July at $78.40 a barrel.
Fire Reduces Output at BP’s Whiting Refinery in Indiana:
175,000 b/d Crude Unit Out for Four to Six Weeks
A fire at BP’s giant 410,000 b/d Whiting Refinery disabled a feeder unit and led to reduced rates to a catalytic cracking unit at the refinery. A 175,000 b/d crude unit will be out of service for between four and six weeks. BP announced that it will also use the down time to perform maintenance on two additional crude units, moving up work scheduled to begin in early May to the present. According to a report from OPIS, the fire occurred on March 22 and several of the units could be out of service until the middle of June.
Reuters, 12:56 March 26, 2007
Quote:
Fire Reduces Output at Holly’s 27,000 b/d Salt Lake City Refinery in Utah
A small fire involving a flare tower occurred about 7 a.m. on March 26 at the 27,000 b/d Holly Corp refinery located near Salt Lake City in Bountiful, Utah. Although the fire was quickly extinguished it resulted in an output reduction of between 10 and 15 percent. There was no information available as to the extent of the damage, nor the estimated duration of the reduction in production.
Reuters, 12:28 March 26, 2007 _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5923 Location: New Jersey
Posted: Mon Mar 26, 2007 6:54 pm Post subject: Re: Another Gasoline Record
Make that 46 incidents:
Quote:
Two injured in explosion at Calumet refinery
Posted on 03/26/2007
An explosion and fire rocked the Calumet refinery in west-central Shreveport late this afternoon and burned a refinery employee.
The fire was contained to a section of the refinery that makes gasoline and was being allowed to burn itself out, Shreveport firefighters and a spokeswoman for the refinery said.
There was no threat to the surrounding area, officials said.
Fire Department spokesman Brian Crawford said a plant employee was working on equipment when gas exploded. Details on the extent of his injuries were not immediately available but the employee is believed to have suffered second-degree burns. He was taken to the hospital by Fire Department ambulance.
Neighbors reported hearing one large explosion, which shook buildings more than a mile away, and a large plume of smoke.
It happened about 5:10 p.m. at the refinery located across Interstate 20 from the state fairgrounds.
Calumet spokeswoman Liz Swaine said the fire occurred in a section of the plant called Platformer No. 1. Fuel to that unit was cut off and the fire was close to being extinguished shortly before 6 p.m.
The cause of the explosion will be investigated by a Calumet team, Swaine said.
The injured employee's family was being notified of what happened, Swaine said.
A minor fire at the plant last week forced a brief evacuation of some employees. That incident happened when asphalt overflowed from a tank and caught the tank's insulation on fire. No one was injured and the fire was extinguished by Calumet's fire department.
KTBS _________________ It's already over, now it's just a matter of adjusting.
Thinking ahead: In about three weeks, we will start to be really reliant on imports to maintain our safety stock of unleaded. The most recent IEA report (page 24) suggests that the European inventories, as of January, were within the realm of what they have been for the past few years, so it is possible that we can skate by this summer relying on additional imports provided this plague of refinery downtime does not affect us too much. Note that the data in the current report is several months old, so no telling what the current inventory levels are.
The absolute maximum the US produced last year during the summer was 9.350 mbpd. Note that as of last week's inventory report, the demand for unleaded was already 9.2 mbpd, in what is supposed to be one of the lowest usage months of the year. By mid-April the seasonal demand will start to pick up, and should be at or near the 9.35 mbpd level. From then on, we are dependent on imports and our safety stock to keep the wheels turning. Actually, we are dependent right now. Current refinery production was about 8.8 mbpd last week, so we are already dependent on at least .4 mbpd imports to keep our supplies relatively steady. In the past couple of years, it has been rare to see inventories of unleaded dip below 200 million barrels for very long.
We could see a maximum demand of over 10 mbpd this summer for the first time.
So, to the europeans reading this, thanks for sending us your spare unleaded gasoline so we can run our jetskis and lawn mowers all summer. If for some reason you are not able to do this, we will have to use up our inventories, and/or somebody is going to have to do without some gasoline.
Joined: Oct 23, 2004 Posts: 5923 Location: New Jersey
Posted: Mon Mar 26, 2007 9:25 pm Post subject: Re: Another Gasoline Record
I don't have a subscription, but you can see highlights here:
Quote:
Higher US Jet Imports Fill Gap Between Supply And Demand
Jet fuel imports are flowing at unprecedented rates into the US. Monthly shipments reached an all-time high of 233,000 b/d in February and are on track to exceed that rate in March. If this trend continues through the balance of the year, imports could average record levels in 2007. US jet imports totaled 187,000 b/d in 2006, down 5% from inflated rates of 197,000 b/d that ballooned in late summer after devastating hurricanes knocked out 20% of US refining capacity. (Monday, March 26, 2007)
Jet Fuel Intelligence _________________ It's already over, now it's just a matter of adjusting.
We averaged about 1.47 mbpd production, and about 1.68 mbpd consumption over the last year, and I am ready to say that the seasonality is not as dramatic as it is for the rest of the finished products, but we are clearly dependent on imports for about 10% of our supply at a given time.
The maximum production last year was 1.622 mbpd, which we were only able to sustain for one week. It happened at just about the same time as we were converting to low sulfur diesel, so maybe this was a way to get rid of some product that could have gone either way.
The Jet Fuel inventory has been declining steadily for the last year and was at 39 million barrels last week. It is a little low but not an emergency yet. It got into the 34-35 million barrel range in the spring of 2004, and was about 36 million the month after Katrina hit, but before that, you had to go all the way back to the mid-90's to find a period where it was consistently below 40 million barrels for more than a couple of weeks.
So if you want to watch this I am ready to say that if this inventory falls under about 36 million barrels, we can consider it to be unusually low, and watch for some funny stuff in the marketplace, or at the end user.
I hope you will tell us if you hear of any shortages, so as to keep the PO.com viewers ahead of the news, which is what we like to do.
Posted: Tue Mar 27, 2007 12:40 am Post subject: Re: Another Gasoline Record
AirlinePilot wrote:
You guys have any data on the situation with Jet Fuel? I'm curious and don't really know where to look.
Thanks.
Philosophical question--If our planes tank up in Europe or asia, is that an import?
More down to earth, I remember a year or two back a number of US airports were very very low on fuel and they were flying planes out to tank up in airports with better supply levels. Talk about taking the going the extra mile for a reasonable tank of gas to the extreme _________________ UNplanning the future...
http://unplanning.blogspot.com
Joined: Oct 23, 2004 Posts: 5923 Location: New Jersey
Posted: Tue Mar 27, 2007 2:57 pm Post subject: Re: Another Gasoline Record
Gasoline futures had a relatively quiet day, and were up about one-half cent/gallon.
I believe we will see record high gasoline prices in California by the end of April.
Quote:
Calif. gas is costliest in nation
By Ronald D. White, Times Staff Writer
March 27, 2007
California said aloha to Hawaii, surpassing that state for the dubious honor of having the highest gasoline prices in the U.S. for the first time in nearly two years.
Motorists here paid an average of $3.184 a gallon Sunday, AAA reported, well ahead of No. 2 Hawaii at $2.975.
"That's a rare thing, but this is a rare year," said Tom Kloza, chief oil analyst for the Oil Price Information Service in Wall, N.J., which compiled the data for the automobile association from more than 85,000 fuel stations.
Gas prices tend to spike in states with high demand and limited refinery capacity, such as California. Usually, Hawaii is the most expensive because it has only two refineries, but this year California has had refinery problems and Hawaii hasn't.
For the week that ended Monday, the average price in California for self-serve regular gas hit $3.152 a gallon, according to an Energy Department survey. That was 3.1 cents higher than the previous week and 48.3 cents above the year-earlier price.
LA Times _________________ It's already over, now it's just a matter of adjusting.
Joined: Dec 02, 2005 Posts: 6440 Location: Oil-addicted Southern Californucopia
Posted: Tue Mar 27, 2007 4:00 pm Post subject: Re: Another Gasoline Record
Costa Mesa, California, this morning:
Has anybody seen anything higher than this? Supposedly San Francisco has the highest prices right now. _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Joined: Aug 14, 2004 Posts: 2066 Location: San Diego, Ca.
Posted: Tue Mar 27, 2007 4:02 pm Post subject: Re: Another Gasoline Record
Its $3.20 for regular unleaded here now. _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
Joined: Oct 23, 2004 Posts: 5923 Location: New Jersey
Posted: Tue Mar 27, 2007 4:19 pm Post subject: Re: Another Gasoline Record
Zardoz, jato, and others, could you let us know when you've hit new records? It will be interesting to see the reaction to high prices.
Cash wholesale gasoline prices in LA closed today 37 cents/gallon over comparable blends in New York City. A year ago today the difference was about 13 cents. _________________ It's already over, now it's just a matter of adjusting.
Posted: Tue Mar 27, 2007 4:49 pm Post subject: Re: Another Gasoline Record
Didn't realize there was a new sticky. Gas at one BP station outside Chicago was up 32 cents in a 9 hour period today. At another BP, in Naperville, gas was up 25 cents since morning. BP wastes little time upon hearing potential bad supply news.
Joined: Apr 28, 2005 Posts: 3679 Location: West shore Lake Eire, MI, USA
Posted: Tue Mar 27, 2007 4:56 pm Post subject: Re: Another Gasoline Record
I use this chart GASO$ to check for records, looks like we only need another 28 cents or so to set a new wholesale record now.
Given the decline in gasoline stockpiles and the refinery trouble that shouldn't be long into the future! _________________ Oxygen: - An intensely habit-forming accumulative toxic substance. As little
as one breath is known to produce a life-long addiction to the gas, which addiction invariably ends in death.--Isaac Asimov
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