With the threat of a large strike being carried out by the United Steel Workers union and a large stimulus bill making its way through Congress, gas prices are going nowhere but up from the current national average of $1.85 per gallon.
Prices have advanced lately because of a growing number of traders who see the new stimulus as a boon for Americans to begin spending, and thus increasing demand for their fuel thirsty vehicles. Traders seem to believe that the stimulus would create demand overnight and somehow dry up the millions of barrels of surplus crude we currently have.
We also have negotiations between the USW and major oil players continuing at this hour, but it seems that talks are far from stopping a strike at 12:01am Sunday morning, and unfortunately, any walkout or lockout will almost guarantee higher gas prices across the country.
Since my last update it has been revealed that even the newest member to the refining industry, Valero, has pledged to idle refineries in the case of a strike. This comes at a huge blow to U.S. consumers who are fed up with prices hikes that have started again to accelerate since gasoline prices hit a low of $1.62 per gallon last month.
Valero joins another large refiner, BP Plc, in annoucing support for the United Steel Workers union, who represents nearly 30,000 workers at roughly half of U.S. refineries. The U.S. would be joining the United Kingdom, who also is dealing with a strike at oil facilities. However, the U.K. seems to have partially dodged a bullet in their worker strike, with enough replacement workers brought in to keep facilities pumping out gasoline for consumers eager for relatively affordable gasoline.
The U.S., on the other hand, does not seem as fortunate if a strike were to be announced here. ExxonMobil seems to be one of the only oil companies with plans to bring in enough temporary workers to keep output on their massive refineries going through the weekend.
The news comes at a terrible time for a U.S. economy crippled by a recession and record unemployment, which may now have to deal with a spike in gasoline prices come Monday if a strike is not averted.
I would recommend that gasoline consumers keep an eye on developments Sunday morning and fill up if necessary before Monday morning, when prices could spike 20-50 cents per gallon nationwide as a result of union workers going on strike and forcing refineries to either find temporary workers, or to shut down their plants, halting all gasoline production.
This strike could also signal the beginning in price hikes expected to last through early Summer as refiners switch to Summer Blend gasoline, a fuel designed to alleviate pollution but costs more to produce.
Fill up and stay tuned!