Oil & Gas News

Fears Rise In The West For Gasoline Price Spike

By KERM YERMAN

Low northern hemisphere gasoline stocks and a heavy period of refinery maintenance in the United States threaten tight supplies and price spikes in the Atlantic basin market as the summer driving season looms, analysts say.

Output cuts agreed nearly a year ago by leading producers have all but trebled crude prices, hitting downstream margins and forcing refiners to cut throughput.

As a result gasoline inventories are down at near-record lows and stocks which would normally have been replenished over the northern hemisphere winter have remained well down from their usual levels by this time of year.

U.S. gasoline stocks at the end of January stood at 200 million barrels, eight million less than the lows seen at the end of January 1997, according to industry figures. By comparison at the same time last year U.S. inventories were 226 million barrels.

Average U.S. pump prices last month hit $1.315 a gallon -- 38 cents more than a year ago and the highest level in nine years of official U.S. government data, not adjusted for inflation.

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That's it folks - we have some strong circumstantial evidence that refineries are officially having problems. No, it's not our over active imaginations. It's happening. The only question that remains is how far will it go? It's damn near TEOTWAKI in New England for home heating oil, I can tell you that.

-- paul leblanc (bronyaur@gis.net), February 05, 2000

Answers

Fears Rise In The West For Gasoline Price Spike is another, earlier thread about this same article.

-- (just@helpin.out), February 05, 2000.

The last Time the Oil Execs.manipulated us into an "oil Shortage",they were convicted in a Miami Court and "sentenced" to pay a ONE Dollar Fine.They are still laughing about it.Is it not Time to start building a Penetentiary in Barrows,AK to send these Corporate Criminals up there for an Educational Lesson???

-- schopenhauer (its cold@up.dere), February 05, 2000.

Hey schopenaur,

What makes you think you are qualified to judge and jury the oil industry into a gulag? I'm so tired of people cracking on my industry. Yes, I know the price is high, but the market is about as pure a "supply and demand" play as your ever gonna see.

Oil companies aren't dumb businessmen, but that doesn't make them criminals either. I've been party to many, many state local and federal investigations of "price fixing" by ambitious politicians. Funny thing is once we get the facts out in court, there doesn't seem to be a basis in fact for the case. It's a complex, little understood industry. The media and politicians are quick to jump on us as we are an easy target for people like yourself who simply don't understand petroleum refining and supply demand balances.

For example, I can predict higher gasoline prices for you this summer. Do you know why? Because like the article says, there is not a whole lot of gas inventory being made because everyone is maxing heat oil production to keep things warm on the EC. In fact people in the Gulf where it is warm are also making more heat oil to send to NY Harbor.

What you don't understand is that this time of the year, refiners begin to think about making more gasoline and if they don't gas will start the year tighter than normal from a supply point of view.

When's the last time you harped about the price of milk? Or orange juice? Or your taxes? Give me a break

-- Gordon (g_gecko_69@hotmail.com), February 05, 2000.

agree gordon, ....

Why so much "maintenance?"

It used to be that opec could never make an agreement that would last because the first to cheat and sell more than they agreed to would stand to make huge profits.

At these prices why are so many refineries down?

I can't figure why crude is $30 a barrel up from $10 at the end of 98, and yet the price of petrol at the pump is up here only to $1.50 from $1.00.

I'd of thought crude at $30 would crash the market.

any answers?....

-- what?me worry (unsureasalways@crazytimes.net), February 05, 2000.