By Mark Huffman
ConsumerAffairs.com
May 19, 2009
A fire at a Sunoco refinery late Sunday has forced a portion of the
plant to shut down, causing a sudden jump in wholesale gasoline prices
this week.
Gasoline futures on the New York Mercantile Exchange rose nearly eight cents to $1.7581 a gallon, a seven-month high.
At the retail level, the nationwide average rose to $2.314 a gallon Tuesday. While remaining stable for much of the year, gasoline prices have begun increasing rapidly over the last four weeks.
The average price at the pump has jumped more than 12 percent in the last month.
Despite the explosion, fire and resulting damage at the Sunoco facility, the refinery was reported running at 85 percent of planned production levels. The refinery had already cut back production because of slower demand caused by the recession.
Even so, some analysts said the drop in output might put a crimp in already tightening gasoline supplies in the Northeast. Tighter supplies would, in all likelihood lead to even higher prices.
The U.S. Chemical Safety Board, as well as the U.S. Occupational, Safety, and Health Administration, are investigating the explosion and fire.
Crude oil prices have steadily risen on mercantile markets around the world and are quickly closing in on $60 a barrel. The market price for gasoline has also risen sharply, helped by the fact that U.S. inventories of motor fuel, which swelled during the first three months of the year, are falling again, now that consumers are driving a bit more and refineries are running at only 80 percent of capacity.
The Energy Information Administration last week predicted that oil prices would average between $55 and $58 per barrel for the second half of 2009. If that were to be borne out, gas prices this summer would stay about where they are now, averaging about $2.21 per gallon nationwide.
In its latest weekly report, Wednesday, the EIA said both crude oil and gasoline inventories in the U.S. declined in the latest week. That surprised many analysts, who predicted that stockpiles would rise slightly.
