Follow-up on likely gas price hike… “triple whammy”

As I said earlier today, gasoline prices are likely to jump across all Speedway States as soon as tomorrow to $1.99 or even higher.

I’ll follow up and let you know what’s going on.

As you may know, Midwest prices have been seen as low as $1.59, much lower than the national average today of $1.891 according to AAA’s Fuel Gauge Report. A large reason of lower Midwest pricing as of late is that PADD 2 storage levels have reached high levels, untypical for this time of year. I have said that we’ve recently benefited from this, what I call a "Chicago Discount". The "Chicago Discount" is due to a regional condition causing Chicago "Spot" Pricing to be lower than other areas.

Now onto the bad news.
Yesterday, ExxonMobil reported shutting down a unit at its 238,000 bpd plant just outside Chicago, IL (Joliet), which would cause a large drop in output at Midwest refineries. This, coupled with news from the DOE that regional stockpiles fell last week, as well as a huge nationwide drop in gasoline stockpiles, will cause a large price spike.

Any Chicago Discount will likely "dry up", and with the changeover to the April gasoline contract also adding to a hike. The gasoline contract for March, expiring today, was 8-cents lower than the new April contract, which takes effect tomorrow, causing a "triple whammy": More expensive April contract begins tomorrow, Refinery outage regionally, and a loss in gasoline stockpiles will definitely cause higher prices.

I would be *shocked* if prices don’t rise tomorrow and stations that purchase new fuel tomorrow would lose money if they do not raise prices.

I am unsure about the amount of the hike, but it may be over $2/gal, as soon as tomorrow morning.

Be sure to fuel ASAP.

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