• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 15 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 3 hours Reality catching up with EV forecasts
  • 9 hours A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 20 hours "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 11 days US Oil Independence is a myth and will always be a myth
  • 6 days The Federal Reserve and Money...Aspects which are not widely known
  • 11 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 15 days Natural gas price to spike when USA is out of the market
  • 14 days "Biden Is Running U.S. Energy Security Into The Ground" by Irina Slav
  • 14 days *****5 STARS - "The Markets are Rigged" by The Corbett Report

Breaking News:

Freeport LNG Gets Regulatory Approval

Gasoline Prices Could Hit $3

The price of gasoline at the pump could reach $3 per gallon because of the cold snap that froze oil wells and pipelines and caused blackouts that prompted unit shutdowns at several refineries on the Gulf Coast.

Based on media reports, at least 1 million bpd in refining capacity is offline, FreightWaves reports, noting that considering the unconfirmed reports, the capacity taken offline could be double that. And while oil wells can be restarted relatively quickly, refineries may need weeks to return to normal operation.

“What we have is an electric generating problem,” said Andy Lipow, president of Lipow Oil Associates, told CNBC. “You don’t have natural gas, and you don’t have electricity. It’s difficult for refiners to turn crude into gasoline.”

ADVERTISEMENT

This means a supply crunch in both gasoline and diesel. Even though the stocks of both fuels are above season averages for the last five years because of last year’s demand slump, prices are likely to rise because of the refinery disruptions.

“In terms of $3 a gallon, this simply provides more momentum for us to get there,” Patrick DeHaan, head of petroleum analysis for GasBuddy, told Bloomberg. “The average rise in the national average from late winter to Memorial Day has been 25 to 65 cents a gallon, which could mean we’re right on the doorstep.”

ADVERTISEMENT

Others, such as Tom Kloza, the global head of energy analysis at Oil Price Information Service, see the problem as a relatively minor one, to be resolved quickly.

“I believe they’ve had orderly shutdowns. They haven’t had any damage or anything knocked out,” Kloza told CNBC. “My guess is this is like a blip in the system, but it’s not a big deal,” he added, expecting the peak in gasoline prices at $2.80 a gallon.

On Tuesday, the average price at the pump in the U.S. was $2.52 per gallon, Bloomberg noted. However, the upward potential may be limited, according to DeHaan, because of continuing movement restrictions enforced because of the pandemic and also because of lower desire to travel amid the Arctic weather.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

ADVERTISEMENT


ADVERTISEMENT


Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News