DALLAS — U.S. consumers facing the highest gasoline pump prices ever for February may see further increases as global crude oil futures climb and breakdowns and seasonal maintenance at refineries reduce fuel supplies.
Gasoline futures have surged 11 percent this year, making the fuel the top performing commodity in the Standard & Poor’s GSCI index. Prices at the pump are up 14 percent this year and have risen 33 straight days, according to AAA data. Brent crude in London, the pricing basis for gasoline imports and for oil used by coastal refiners, advanced to a nine-month high Feb. 8.
Unit breakdowns and seasonal repairs reduced refinery processing by 8.3 percent since mid-December, cutting fuel production, Energy Information Administration data show. Regular gasoline has jumped 45.6 cents this year, the fastest increase in AAA data back to 2005. Prices may peak earlier than they did last year, according to Avery Ash, a spokesman for AAA, the nation’s largest motoring organization.
“What’s driving the price up is the fear we might not have enough supply,” said Jason Schenker, president of Prestige Economics, an Austin, Texas-based energy consultant. “It’s a national concern.”
Gasoline for March delivery advanced 1.79 cents to $3.3145 a gallon on the New York Mercantile Exchange Feb. 15, the highest settlement since Sept. 28. Brent crude on ICE Futures Europe exchange has increased $5.73 this year to $116.69 a barrel.
The average nationwide pump price gained 1.8 cents to $3.748 a gallon, 19.2 cents higher than a year ago, AAA said on its website Tuesday. In 2008, when prices reached an all-time high of $4.114, regular gasoline cost $3.032 on Feb. 18.
“We have sustained higher crude prices and concern also about refinery capacity,” said Stephen Schork, president of the Schork Group Inc., an energy advisory company in Villanova, Pa.
Seasonal maintenance typically peaks in March and April, boosting speculation that inventories may dwindle just as demand picks up in May when U.S. drivers head off on vacation. Hedge funds increased net-long positions in gasoline futures to 90,120 contracts of futures and options in the week ended Feb. 12, the most since April, the Commodity Futures Trading Commission reported Feb. 15.
An average of 1.5 million barrels a day of refining capacity will be offline for planned work from January through May, according to Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a research consulting company in London. The outages will peak in March at over 2 million barrels a day, Sen estimated.
Prices climbed as high as $3.936 last year in early April, according to Heathrow, Fla.-based AAA.
“Gas prices are rising at a faster-than-expected pace,” Ash, an AAA spokesman in Washington, said in an interview Tuesday. “There’s reason to suspect the peak we see will be earlier this year. We still expect they will peak at a lower level than in 2012,” but they may approach that level, he said.
The EIA revised its forecast for 2013 gasoline prices up to $3.55 a gallon Feb. 12, from a $3.44 estimate in January.
The jump in gasoline futures has swelled the crack spread, a measure of refining profit. April-delivery gasoline’s premium versus Brent was $21.85 a barrel, 53 percent higher than a year ago.
Schork predicts the retail average rise another 15 cents to 20 cents by the end of February. Prices then usually climb higher as the more-expensive summer-grade gasoline makes it way to the pumps in mid-spring.
Shutdowns across the country are increasing concern about supply availability and boosted wholesale gasoline prices.
On the East Coast, which includes New York Harbor, delivery point for the Nymex contract, Hess Corp. will close its Port Reading, N.J., plant later this month. It represents 7.7 percent of East Coast gasoline-making capacity, estimated Andy Lipow, president of Lipow Oil Associates in Houston.
Philadelphia Energy Solutions shut the Girard Point section of its plant, the largest near the New York trading hub, in late January for 60 days of planned work.
BP’s Whiting, Ind., refinery, the biggest serving the Chicago market, won’t bring its 225,000-barrel-a-day crude unit back online until the middle of this year after shutting it in November to convert the unit to process Canadian crude, Chief Executive Officer Bob Dudley said in the company’s fourth- quarter earnings call on Feb. 5.
Gasoline in Chicago, after sinking to 47 cents below Nymex futures Dec. 18, was 2.75 cents under on Feb. 15, according to data compiled by Bloomberg.
“We’ve obviously seen crude prices rising over the last couple of months, and we’ve seen the switchover to summer-grade in the midcontinent and Midwest earlier than normal and that can cause the peak to come a little bit earlier in the year,” Ash said.
On the Gulf Coast, Motiva Enterprises is shutting units for work at its Port Arthur, Texas, refinery, the largest in the U.S. The plant’s new 325,000-barrel-a-day crude unit, plagued with fires and leaks since its May debut, is running at about 80 percent of capacity. Conventional 87-octane gasoline jumped to parity to futures today from a 22-cent discount Feb. 5.
Refineries on the West Coast, including Valero Energy Corp.’s Wilmington and Tesoro Corp.’s Golden Eagle plants, have had to cut fuel production to repair equipment in the past two weeks. California-grade gasoline, or Carbob, in Los Angeles, was 31.5 cents over futures Feb. 15, from a discount of 5.5 cents Jan. 22.
Demand for the motor fuel is showing signs of improvement at the same time as refineries are slowing down. Deliveries of gasoline to wholesalers, was 4.4 percent above a year earlier in the four weeks ended Feb. 8, according to EIA data.
“Part of this rally was based on EIA stats showing gasoline demand for first part of 2013 is about 3.8 percent higher than the corresponding period last year,” Lipow said. “The preseason rally we normally see in April and May appears to be occurring in February this year. But the market has gotten way ahead of itself.”
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Comments » 62
floridacarpenter writes:
The entire gasoline industry is the biggest swindle in the world. They are all a bunch of crooks and the government lets them get away with it.
mjohn2659 writes:
Tks liberals!
HadYourPhil writes:
Speculators, speculators, speculators. And I agree 100% with floridacarpenter.
Colorado (Inactive) writes:
And republicans give the industry tax breaks. Anybody that supports republicans is not very smart OR just plain stupid.
tiedyeted writes:
Bad headline. It should read "Gasoline prices soaring on the greed of speculators who seek to make money on our misery."
ebabin writes:
I guess your so clueless to understand what is meant by the inability to refine all the oil that is backlogged. Your answer would be to drill more I suppose. Make your Uncle (Big) Dick Cheney happy with your ignorant views.
TSOL writes:
When Bush was president everyone including the MSM was screaming why isn't Bush doing something to lower gas prices. Now that Obumbles the Magical Messiah is president not a single word is uttered by the MSM. Wasn't it Obe's own cabinet member who wanted $6.00 a gallon gas like in Europe well looks like they are working their way there. I can see it now next Obe & crew will be pushing hybrids and electric cars. You know never let a good crisis go to waste right Libby's.
Diamond87 writes:
I don't understand how you people are blaming the democratic party for this. The gas prices were at their highest when Bush was president. This game we have been playing with the gas prices started in 2000 when Clinton was still in office. OPEC clearly stated that they were going to cut the production of oil. They played the "supply and demand" card. Since then it was a bunch of excuses like bad weather in the gulf, etc., that increased the price of gas/oil. It's all lies and greed. It's a monopoly. But our government could do something about it if they wanted to. It doesn't take an intelligent person to figure out that the price of fuel is affecting everybody. It is what drives up the price of everything else. Yet no one even wants to talk about it. The government acts like they are victims of it too and they are "just like every one of us with families to feed," etc. Whatever happened to a good old fashioned boycott? Obviously any corporate entity won't boycott fuel but we need to take a stand somehow and in some way. As for the political side of things, I think the president ought to address the nation on behalf of this matter rather than just hide behind other issues. Big business and big corporations are ruining this world. These people don't have souls. They do whatever they want and make the rules and laws to benefit themselves. If you found a way to run your car on something other than gas and oil, they would find a way to put you in jail for it. If you attempted to sell your idea, they would kill you.
Cherieo3 writes:
If this Administration would get off their butts and really make the effort to become energy independent...OPEC would see the competition and the price of oil would DROP like a bomb. But NO..this bunch of DC crooks WANT gas prices high...THEY DON'T HAVE TO DIG INTO THEIR WALLETS and pay for their rides.
Americans are supposed to 'suffer'..that's their story. We are to walk, ride bikes or public transportation...do you remember hearing that song????
Cherieo3 writes:
AMEN...TSOL...exactly correct! They actually want $8.00+ per gallon.
SunStar writes:
Seems like the Fed has no control in place to safeguard public interest. Whenever there's an issue in middle east gas price goes up. Now it goes up even on refinery repairs, you must be kidding! Basically oil companies come up with some crazy story each time. Why the Fed cannot release some stock from the reserve to offset it. We're trying to rebuild the economy and fluctuating gas prices send out wrong signal to public and it hurts the recovery efforts. Is somebody listening?
Z07 writes:
Gas prices were less than $2 a gallon when Bush left office. Obama wants gas prices to soar. He said so. You can easily look it up. He won't allow the pipeline from Canada to go through. He won't allow drilling on federal lands. He gives billions to his friends in the green energy industry, all of whom have gone bankrupt.
Get a clue
ebabin writes:
Again the dimwitted responses come out.
In 1980 the price of gas was around $1/gal. Bread was $0.25 a loaf. Today's gas is still less than $4/gal in most neighborhoods. The price of bread is almost $2 a loaf. (For those of you too incompetent to multiply, that's 4 times the price of gas more and 8 times the price of bread.) Why aren't you screaming about the price of bread? I guess because Obama is not the baker.
Why don't you get out of your 15mpg SUV and give that fat arse some exercise?
Z07 writes:
Maybe if you democrats would let them build a few more refineries that would also help. get a clue
PMC_Rider writes:
Well, hang on a minute there, Charlie. Since when is walking or riding a bike somewhere "suffering?" Are you really that pathetic? Is your picture on peopleofwallmart.com?
I live 1.25 miles from downtown, and I walk or ride my bike there regularly. It's called "physical activity" and "helping the planet" and "not being a fat bag of assmeat."
I also drive a Prius, so that when I *do* have to drive somewhere, I get 50mpg.. I'm sure you'll go ahead and call me a name for that. It really hurts, too. I'll shed a tear as I fuel my Prius next month.
PMC_Rider writes:
What part of "finite resource" don't you understand?
NeezDutz writes:
Where's Nancy Pelosi? and why isn't she calling for the President to take action, now?!
Diamond87 writes:
Hey ZO7, "get a clue?" When Obama took office the prices were in the $2 range. "Get a clue?" That's very rude. Go ahead and cry and whine about your political crap. The Dems have won the last 2. Haha I laugh at your demise. Get a clue yourself. It obviously doesn't matter who the president is. This trend with the gas prices has been going on for 13 straight years now. By the way aren't the republicans in control of congress? I don't know. I go to work and try to take care of myself. I don't have time to play politics. If Romney had won it wouldn't change my life any. I am not going to cry about who the president is. Just as long as it is not George Bush Jr. Then again I wasn't a big fan of Clinton either. He put more cops on the streets. Where I grew up we didn't even need cops. Next thing I knew I was constantly being harrassed by the police. Obviously neither party is stepping up to the issue of soaring gas prices. Open your eyes.
NeezDutz writes:
I'm real happy that you can afford to purchase a $27,000 car. A lot of people are living paycheck to paycheck and can't afford nor have the credit to get something new. I guess, 'those people' don't matter to you.
By the way, increased fuel prices = inflation...you will be affected every time you buy something.
I didn't know Prius was another name for High Horse
NeezDutz writes:
Don't expect a reasonable response
ebabin writes:
So the government should do this? Boy, this guy wants to nationalize industries. And I should get a clue?
coolkraft writes:
pathetic the cost for gasoline...and no response or help from anywhere..and our "friends" overseas have lowered their production.. how do families with two working driving breadwinners manage....
swfljim writes:
Oil is a commodity-even oil pumped from beneath U.S. soil. It doesn't belong to us (Americans). It belongs to multi-national corporations that sell it on a global market to the highest bidder.
Today, there are many countries (China and India for example) that are rapidly emerging from third world status and have an ever increasing need for oil.
Even other countries outside of the Middle East that have large oil reserves (Canada for example) have gas prices that are much higher then the U.S.. A nation can produce much more energy then it uses and still face high gas prices because again-the oil doesn't belong to the nation-it belongs to the oil company. Canada wants to build the pipeline across the middle of the U.S. not so it will be easily deliverable to America, but because it needs to go to a Gulf shipping port so it can be easily delivered to the rest of the world.
This is economics 101 folks-supply and demand. There is speculation that effects the price, but that is true of every commodity from pork bellies to orange juice.
Laugh all you want at Prius's and other hibrid cars-or the Chevy Volt-or the use of natual gas to power cars and trucks-but if you want any control over the cost of gas (or having to pay for it to begin with for personal transportation)-that is the future.
Who is President of the United States has very, very little to do with the cost of gasoline.
PMC_Rider writes:
I bought it used, just this past Sunday, for $15K.
Rebuttal?
PMC_Rider writes:
And just to follow that up, if you can't afford a $15K hybrid, maybe you could instead pick up a 50cc scooter for running errands solo around town. Used ones sell for under $1000. You'll get 75mpg and you're not even required to insure it!
Failing that, ride your bicycle.
There are plenty of ways to reduce fossil fuel consumption. The only excuse is laziness.
Al_makes_me_feel_like_marching writes:
then they turn around and heavily donate to obama who accpets the money with open arms.
unfatcat writes:
It's weird how many excuses are made for the price changes in oil. Real economics would state that since the demand for oil is down due to less jobs, less driving, less manufacturing, etc.; the price of oil would be down without an increased demand for oil. But inflation would cause the price to go up. But, the Whitehouse says there is no inflation. You know how the price of food has been getting higher for four years, while the product has gotten smaller; that's inflation.
privateroad writes:
Obumbler can't control the price, he is helpless in these international situations. Time to blame cheney because blaming bush is so overplayed. Maybe buy a chinese scooter so we can send more money their way. Electric cars use natural resources to manufacture and charge them. The lithium for the batteries and the coal they run on are worse for the environment than most gas cars. Save your Bs rhetoric for someone who is stupid enough to believe you.
privateroad writes:
Wait until the battery problems start., without the warranty it will be too expensive to repair and now it becomes toxic scrap in a recyclers yard.
NeezDutz writes:
As stated in my last comment. most people have little money, if any at all. Living paycheck to paycheck with limited credit.
$15k - At a great % rate of 3.5% at a 3 1/2 years = $425.00 per month + tax, tag and title + possible down payment.
Total savings on a once a week fill up at a 15 gallon tank is $130-$150 per month.
For most people, they own an older vehicle that's paid off because that's all they can afford.
What else you got?
Oh yea, did you not see the immense amount of inflation is comes with increased fuel costs?
results writes:
What is the problem with gas prices, this is the revenge you all voted for. It should increase to $10 a gallon.
Therealist writes:
Could have got a brand new one for $17k. Maybe shop a little more carefully next time.
gl1800 writes:
Actually you are the misinformed individual. How many US refineries have been built in the past 30 years - One. How many have shut down - over twelve. East coast refineries use oil from the Mideast (more expensive). Less oil is now refined from the south due to the gulf oil wells being shut down by Obama. They have been allowed to start back up but most of the oil derricks have been moved to Brazil and other countries. There was a plan in place to build a pipeline to move oil from Canada to the United States. This oil along with oil produced in the Bakken reserve located in Montana and North Dakota was to be piped to the southern refineries. Who blocked this pipeline (the Keystone)- you guessed it Obama. WTI oil (oil from West Texas and the Bakken reserve) is now trading for $20.00 less than the international price of oil due to the inability to ship it to refineries in the south. Last but not least there are over 55 different kinds of blends of gas that must be used to satisfy local and federal requirements. An example of this is that The Clean Air Act requires use of oxygenated gasoline in areas where winter time carbon monoxide levels exceed federal air quality standards. In the summer they switch back to other required blends.
PMC_Rider writes:
I love all the BS you angry bags of misery come up with.
Therealist: You can not buy a new Prius for $17K. Base MSRP on the car is $24K. Dealers pay over $17K for them. Book value on my 2010 is over $17K. Go check NADA or Kelley. We'll wait. Also, why buy brand new when I can reuse someone else's car? It kinda fits with the whole theme.
Privateroad: My Prius is Toyota certified for a full year from now. And even if it does need a battery after that, I'll just repair it -- the cost of which is falling steadily, btw. Chit happens, right?
NeedDutz: I'm *really* trying to figure out what your point is. Did I say that rising gas prices are awesome? I don't think I did. Did I say that they won't affect people adversely? Pretty sure I did not. I just listed some ways to minimize their impact. Did you not read my followup on the 50cc scooter? You can't get more economical than that. Or did you just want to complain *at* someone instead of to the wall behind your desk?
lb5361 writes:
"And the GOP continue to fight for tax payer subsidies for the greedy blasturds!"
lb5361 writes:
Most don't. They are called the "working poor".
Z07 writes:
They've recently discovered hundreds of years worth of oil just in the USA alone. Again, get a clue.
Z07 writes:
(This comment was removed by the site staff.)
Z07 writes:
PS. I'd warn you about the throttle sticking on those toyotas but since they're so slow anyway what does it really matter.
PMC_Rider writes:
1) I was driving an FJ Cruiser until Sunday, when I traded it in for the Prius.
2) Most of our driving is up and down 41. We're getting about 47mpg average on our first tank with it so far.
3) Having worked as a service manager at a motorcycle dealership for four years, I've probably ridden more motorcycles than you, tough guy. On the order of several hundred, easily.
I currently own two Honda VFR's, both of which would leave your dated pile of lead in the dust while getting better fuel economy. And that's not trash talking; it's simple math. My older VFR is 0.8L displacement and 96bhp, the new one is 1.2L and 166bph. And your "hog" probably gets closer to 35mpg (at best) -- which I'm sure you know. What's your range on a full tank? Do the math.
Z07 writes:
Your last statement tells me you don't know what you're talking about. Are you one of those idiots that looks at the computer readout that says what mileage you're getting at a particular moment in time? I bet you don't even know how to really figure gas mileage. And you don't know anything about Harleys.
Enjoy your prius sissyboy.
PMC_Rider writes:
1) It's distance over fuel -- even you should be able to "really figure gas milage" with an equation like that.
2) Harleys are overpriced, underperforming garbage. When I "slow down," I'll buy an ST or a GL.
3) I am enjoying my Prius. It's awesome.
lemonjello writes:
Approximately 50 billion barrels of producible oil.... http://seekingalpha.com/article/25640...
nativeonepointtwo writes:
For the record, PMC_Rider, I understand what finite means. Many here seem to not.
PMC_Rider writes:
Great, so at 7B barrels / year and swelling, you've got us covered for a whopping 5 years or so!
http://www.eia.gov/tools/faqs/faq.cfm...
All we have to do is extract it from the earth's crust and then refine it -- and that's practically free and will have no side effects on our environment!
Let's all go buy Hummers!
PMC_Rider writes:
Cheers, native.
DeweyCox writes:
If I was gay (and I am not) I too might be torn between the Fj cruiser and the Prius.
Maybe Testosterone treatment prices will come down. Just sayin.
THE_Aquaman writes:
Didn't Obama promise to take care of this? Hope and CHANGE?! LOL
Z07 writes:
Dewey gets it. Dewey has a clue
Z07 writes:
Here is another clue. Oil is not finite. Look it up.
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