Oil prices fell on Wednesday…
The oil industry may face…
The fire at Chevron’s refinery in Richmond, California is expected to cause gasoline prices to rise, although analysts do not yet know by how much. They are waiting until Chevron releases a full report on the damage done to the plant.
Due to initial fears of a severe loss of supply from the plant the cost of gasoline rose 30 cents a gallon the day after the fire, but has since started to fall again as Chevron manage to reopen a part of the refinery in order to continue producing small amounts of hydrocarbon fuels.
Tom Kloza, chief oil analyst for the Oil Price Information Service, said that by Monday “you should see California gasoline prices at or near $4 a gallon again.”
A second, smaller fire broke out yesterday, causing fears that the facility is still unstable, although Chevron claim that it was only small, “resulted in no injuries, presented no immediate threat to the public, and was extinguished in minutes.”
In order to access the main section where the fire occurred, Chevron must wait whilst California’s Division of Occupational Safety and Health compiles a structural engineering report of the area in order to determine if it is safe to be explored.
Agency spokesman Peter Melton said that “they don't want anyone going into the area until they are sure it is safe and that no one is put at risk.”
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com