Effect of Chevron refinery fire on gas prices is unclear
26 replies, posted
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[quote]The expected run-up in gasoline prices after a major fire at a Bay Area refinery may not come as quickly as expected, but it's coming.
What isn't known at this point, analysts said, is how bad it will get.
The market is waiting for Chevron Corp. to report on the severity of the damage to its 2,900-acre refinery in Richmond, Calif., which opened in 1902.
Chevron said Wednesday that the refinery, which was shut down because of the fire at one of its units, was now partially operating. A spokesman for the company did not say how much it was producing.
At maximum capacity, the refinery produced was much as 243,000 barrels a day.
Wholesale gas prices shot up 30 cents a gallon Tuesday, one day after the fire. Analysts at first said prices at the pump could go up as much as 35 cents a gallon within days.
But a bit of calm came over the market Wednesday and wholesale prices retreated by a little more than 6 cents.
There were indications that the situation in the refinery was still unstable. On Wednesday there was a second, small fire at the facility. Chevron issued a brief statement, saying the fire "resulted in no injuries, presented no immediate threat to the public and was extinguished in minutes."
It wasn't even clear when Chevron would be allowed to inspect the tower where the fire began. The state's Division of Occupational Safety and Health said the company must first file a structural engineering report showing how it will enter the area safely.
Agency spokesman Peter Melton said, "They don't want anyone going into the area until they are sure it is safe and that no one is put at risk."
Despite the uncertainty, Tom Kloza, chief oil analyst for the Oil Price Information Service, said by Monday "you should see California gasoline prices at or near $4 a gallon again."
Motorists said a surge in pump prices would be unbearable.
"Even with two jobs I'm not making enough money," said Claudia Menendez, 30, a single mother who lives in Los Angeles who was at a Mobil station near USC. "To be honest it's gotten to the point where I think I have to get rid of my car."
The price of gasoline was already on the rise even before the effect of the fire could be felt on the consumer level.
The average price of a gallon of regular gasoline in California had climbed 6.2 cents over the last week to $3.875, according to the AAA Fuel Gauge Report. Analysts attributed this to oil prices having risen $15.66 a barrel since hitting a low for the year of $77.69 a barrel in late June.
Price spikes in oil and gasoline are not unusual because of major changes in the industry over the last few decades.
Since 1985, the nation's refineries have increased output 11% through large-scale gains in efficiency and productivity, said Rayola Dougher, a senior economic advisor with the American Petroleum Institute. But during that same period the number of refineries in the U.S. fell more than 35% to 144.
The U.S. has not opened a major new refinery since 1976.
"When you concentrate fuel production down to a much smaller number of players, prices are much more likely to spike when one of those refineries goes down," said Joe Hahn, an associate professor at Pepperdine University Graziadio School of Business and Management. "Every refinery is more important, and supplies and prices are affected very quickly."
Hahn cited several examples. In 2005, after hurricanes Rita and Katrina struck Gulf Coast refineries and other facilities, the U.S. average for gasoline climbed above $3 a gallon for the first time. The spike lasted a week.
In 2008, after two more hurricanes closed Gulf Coast refineries, gasoline prices rose as high as $5.21 a gallon in the Southeast. Prices returned to normal within two weeks.
Earlier this year, gasoline prices in the Pacific Northwest rose as much as 70 cents a gallon during the three-month period when BP's Cherry Point refinery in northwest Washington state was shut down after a fire.
Over the last week, Midwest gasoline prices climbed 25 to 30 cents a gallon after two oil pipeline ruptures and refinery outages in Illinois and Indiana.
"There are too few refineries concentrated in the hands of too few owners," said Charles Langley, gasoline project manager for the Utility Consumers Action Network in San Diego.
California has 14 refineries, but Chevron's Richmond facility supplied as much as 15% of the state's gasoline, he said.
"Fuel prices are volatile in California," Langley said, "because we don't have a robust, competitive refinery industry."[/quote]
[url=http://www.latimes.com/business/la-fi-chevron-gas-prices-20120809,0,3198696.story]Source[/url]
I hope it stays the same, but gas prices have been going up for a while now.
More like "ho much will they make it go up using this as an excuse"
Don't try and bullshit us, we know there is quite a bit of oil and the only reason they price it so heavily is because they know they can get away with it, much like food. But at least food isn't terribly expensive.
I live in central Illinois and the price of gas jumped 50 cents overnight a few nights ago. :(
[QUOTE=Splash Attack;37145107]I live in central Illinois and the price of gas jumped 50 cents overnight a few nights ago. :([/QUOTE]
I live in Indiana, just an Hour West of Chicago, ours went up as much as 60 cents. It's about 3.98 right now.
Still at the stuck rate of $1.21/liter where I live. It's been that way for a month or two now.
[QUOTE=BananaFoam;37145155]I live in Indiana, just an Hour West of Chicago,[/QUOTE]
I'm Sorry.
I live just south of Indianapolis, Gas Prices are also about 3.80-3.90 depending on how close you are to the city.
Why should I suffer due to their faulty facilities? If anything they should continue to push out fuel at the same price at the cost of their own profit.
[QUOTE=Splash Attack;37145107]I live in central Illinois and the price of gas jumped 50 cents overnight a few nights ago. :([/QUOTE]
$3.45 here
Some Mitt Romney economic bullshit going on up here.
[QUOTE=BANNED USER;37145471]Why should I suffer due to their faulty facilities? [/QUOTE]
It's an excuse for them to make money.
[QUOTE=Splash Attack;37145107]I live in central Illinois and the price of gas jumped 50 cents overnight a few nights ago. :([/QUOTE]
Central Illinois as well. $3.92
Chicago gas is expensive as fuck, up to 4.60 in some parts of the city. Thank god for my unlimited CTA card.
More on topic I wonder if will change Obama's ratings as some people still think the Prez controls all gas prices using some magic switch.
Then it turns out they torched the thing to use it as an excuse to raise the prices or something.
Monopolies are bad, specially when run by assholes.
[QUOTE=BananaFoam;37145099]More like "ho much will they make it go up using this as an excuse"
Don't try and bullshit us, we know there is quite a bit of oil and the only reason they price it so heavily is because they know they can get away with it, much like food. But at least food isn't terribly expensive.[/QUOTE]
Food is terribly expensive, much more than it should be. Especially for any even remotely healthy food
Where the fuck is Peter Defazio, gas prices fucking dropped a whole dollar here in Oregon when he called for an investigation..
That happened in my neighboring town, apparently gas prices could go up as much as 30 cents :P
[QUOTE=Biotoxsin;37145879]Food is terribly expensive, much more than it should be. Especially for any even remotely healthy food[/QUOTE]
Now yes, artificial price inflation does occur in both food and gasoline, but that said... Generally speaking, food and gas are getting more expensive because the supply is decreasing and the demand is increasing, simple as that.
[QUOTE=Benstokes;37146744]Now yes, artificial price inflation does occur in both food and gasoline, but that said... Generally speaking, food and gas are getting more expensive because the supply is decreasing and the demand is increasing, simple as that.[/QUOTE]
The rate at which they increase or decrease has little to do with their current prices, if anything their prices could be 200% of what they should be and because of both the supply decrease and the corporations' massive greed and desire to keep it at 200% there's a steady increase in price
I live about 20-40 miles way from that refinery so I hope the gas prices aren't fucked up over here.
Gas is 3.57 now for me, but it was slowly going up till this happened. I imagine it being 4 dollars in a week.
While I know it's sounds like shit to most people, high gasoline prices aren't necessarily bad in my opinion. If it makes people use less gasoline, it's good - though I know some of you out there need a car to get back and forth. Bicycles should really be more prevalent in the US.
Just FYI here in Czech Republic - central Europe gas is at ~ $6.85 per gallon.
Oh and our average wage is like half of your average wage, too, so, if we took the wage disparity into account, for you it would be about $13.7 per gallon.
[QUOTE=Fourm Shark;37145458]Where I live, its at $4.30 a gallon.[/QUOTE]
Where I live it's over $11/gallon -- do I win?
[QUOTE=GoDong-DK;37150056]While I know it's sounds like shit to most people, high gasoline prices aren't necessarily bad in my opinion. If it makes people use less gasoline, it's good - though I know some of you out there need a car to get back and forth. Bicycles should really be more prevalent in the US.[/QUOTE]
I'm a delivery driver. My pay is directly dependent on the price of gas. I don't see how this can be anything but bad for me.
Also, I don't think you realize how difficult it would be to use a bicycle for one's main source of transportation. That kind of thing is only possible in large cities. America doesn't have the luxury of everything being so close together like in Europe. It was built to accommodate the automobile.
[QUOTE=Splash Attack;37150261]I'm a delivery driver. My pay is directly dependent on the price of gas. I don't see how this can be anything but bad for me.
Also, I don't think you realize how difficult it would be to use a bicycle for one's main source of transportation. That kind of thing is only possible in large cities. America doesn't have the luxury of everything being so close together like in Europe. It was built to accommodate the automobile.[/QUOTE]
No. It was built with thought of everlasting excess of cheap energy. That's now that reality is becoming.
You are shafted. Gas will only get more expensive. Think about alternatives. There is no other solution.
[QUOTE=latin_geek;37145866]Then it turns out they torched the thing to use it as an excuse to raise the prices or something.
Monopolies are bad, specially when run by assholes.[/QUOTE]
Never attribute to malice that which is adequately explained by stupidity.
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