Posted on 03/26/2014 4:50:33 AM PDT by thackney
Gasoline prices have been largely unchanged in the days since an oil spill temporarily closed the Houston Ship Channel and prompted worries that lower refinery output might reduce fuel supplies and force up the price at the pump.
Nationally, unleaded gasoline sold for an average of just over $3.53 per gallon Tuesday, according to AAA, up less than a penny from the day before the spill. Houston-area gasoline sold for $3.38 per gallon, similarly unchanged despite the channel’s temporary closure.
Refiners haven’t said much about how their operations were affected by the waterway’s closure, which was lifted partly on Tuesday. Officials with Shell Oil and Valero Energy declined to say whether the channel’s shutdown affected their production. A spokesman for Exxon Mobil Corp. said it had reduced production rates at its Baytown refining complex but declined to say by how much.
In 2008, as Hurricane Ike barreled towards the Gulf Coast, refineries in the region closed operations. On the weekend the hurricane struck, the national average gasoline price spiked 12 cents–exceeding $5 per gallon in some parts of the country at a time when gasoline prices overall were higher than now.
The Texas Gulf Coast has refining capacity of nearly 4.5 million barrels per day, about 25 percent of the country’s refining capacity, according to 2013 figures from the U.S. Energy Information Administration, and the Houston Ship Channel serves a significant portion of those refineries.
So why didn’t market worries about possible disruptions prompt higher prices at the pump?
Michael Green, a spokesman for AAA, said the impact was softened, in part, by the domestic energy production boom. Refiners in the area are getting more crude from the Permian Basin and the Eagle Ford Shale in Texas and even the Bakken in North Dakota. In short, they don’t rely on ships for crude as much as they used to. If the spill had occurred a few years ago, the effect probably would have been more pronounced, he said.
Green also said that the harsh 2014 winter weather kept motorists off the road in many parts of the country, meaning gasoline supplies are available even if some refining is temporarily interrupted. “It’s just the simple fact that if you have a snow day, that’s thousands of people who aren’t driving,” he said.
Patrick DeHaan, senior petroleum analyst with GasBuddy.com, noted that the channel closure came at a time of year when many refiners reduce operations anyway to perform maintenance and prepare to make summer gasoline blends. That would temporarily reduce their need for the channel to ship crude in and refined products out.
But a prolonged closure, or one later in the year, might well have caused a gasoline price spike, DeHaan said. “If this was the summer, and all these refineries were on full tilt, it probably would have been more noticeable,” he said.
DeHaan compared the situation to low water levels on the Mississippi River last year, which resulted in the Army Corps of Engineers closing parts of the river and disrupting some barge traffic carrying refined products. That resulted in some localized gasoline price increases.
This week’s disruption in vessel traffic had no such effect. “I would say that this was more significant on paper than it turned out to be for refineries,” DeHaan said.
ping
The powers that be have to wait for a better excuse for price spikes.
LOL! Well, they seem to be again “skyrocketing” where we are. Of course that’ll be attributed to the switch from winter blend to summer blend no doubt. Cash for regular is currently at $3.65 in Reno.
Every March prices go up because refineries close for repair work. Building new refineries cost too much given EPA mandates and such.
Proving that maybe the next weather report of high winds likely may not spike plywood.
Gas prices went up .20 in Fort Worth TX on Friday, 3/21.
It was 3.29 Thursday, Friday morning it was 3.49.
Diesel is 3.59, no change.
Stupid democRATS (and the people who vote for them).......
Gas Buddy map of the US shows how varied the price range is
depending upon the section of the county.
http://www.gasbuddy.com/gb_gastemperaturemap.aspx
My question is, why were we paying emergency prices before the emergency?
Our oil production is up, refineries are churning away, Iran no more belligerent than usual and we aren’t going to oppose Putin. If $3.50 is the new baseline, where are the prices going this summer or when something bad really happens?
Yep. Gas prices are still at their low low price!! No “spiking”!!
Prices went up 20 cents/gal in my area yesterday.
Here’s a question that every one might want to ask an ANTI_PIPELNE idiot. When was the last time there was an oil spill from a pipeline? This is the best argument for that Canadian pipeline yet.
We are not paying emergency prices. Crude oil is relatively expensive.
I guess we are dealing with a new norm. Expensive previously was attributed to an emergency. My point is that because expensive is the new norm, what can we expect if there is a true emergency?
More rhetorical than needing a specific answer.
Thanks!
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