Pipelines, refineries, and gas prices, oh my!

Enbridge had a 1200 barrel spill in one of their pipelines on Friday in Wisconsin. Although they replaced the pipe that was damaged on Tuesday, they won’t be getting it back online until the U.S. Transportation Secretary is convinced that they can reopen without another spill.

That is causing Citgo’s Lemont, Illinois plant some problems, as it’s been shut down due to other issues, but won’t come online until the crude is flowing again. If that weren’t enough, BP’s Whiting, Indiana refinery had a small fire that took down the facility on on the 23rd of July. It still has not reopened, and may not reopen for at least two weeks, maybe more.

What does this mean to you? Higher gas prices. It’s as simple as supply and demand. Will we see prices rise above $4? Some parts of Michigan have. It’s a magical barrier, and I think the 61.3¢ boost in Chicago CBOB price since July 25th when averages were in the $3.50-3.65 range will warrant it. If the barrier is broken, Indiana and Michigan could see upwards of $4.10, while Ohio should stay below $4.

Updated: August 1, 2012 — 9:55 pm

12 Comments

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  1. $3.899 is the new Ohio price. Surprised they’re showing some restraint, with spot being $3.30. Barring a precipitous drop, we’ll get another spike on Monday(or over the weekend). I believe that would make 3 in a week.

  2. next hike is over the $4 mark by next week. Traverse city, MI is at $3.959

  3. So far I am right on my predictions. When prices dropped into the high 70’s “tensions” and “hope” brought us back to the desirable price. Once these two became old news, it was the old faithfuls “upsets” and “weather” to carry the burden. And what upsets they were, grandma.

    My guess is we’ll stay high until some reason kicks crude to 100 again, and continue as usual with normal spikes at the time where gas prices normally drop.

  4. What a difference 10 miles makes! Just filled up today in Anderson, Indiana for $3.05. Meanwhile, just a few miles up the interstate, gas in Muncie has shot up to $3.95. With all of these sudden price increases and big ones at that thanks to Greedway being in the area, you’d think we were at war with Iran or something.

  5. I am impressed with the reduction of the unemployment rate by full 4 percentage points. All these millions of newly employed people will need to drive to work, thus straining our already fragile oil supply and pushing oil prices up by 4 percentage points as well.

    Pretty believable, right? (NOT)

  6. Down in San Antonio, Tx right now (pilot), and on our way to the hotel, al the gas stations were in the low $3.30’s. Disappointing to see that.

  7. That plus this?? Absolutely, IMHO!!

    Oil
    95.209999
    1.25
    +1.33%

  8. $3.999 appears to be our new price today. Gas up at $3.80 or so while you can!

  9. $3.95 is what I am seeing here in Fort Wayne. With (what I calculate to be) a spikeline locally at $3.88, I don’t blame them. But man-o-man, is this the new normal?

  10. The new normal is keeping margins high at extraction, refinement, stand distribution. The first was accomplished by the usual hope, China, Europe, and geopolitical events. The second by refinery production and output management and the third by means such as reduced competition, zone pricing, and other means such as spikes.

  11. I think there might be a hike Monday or early in the week to $4.159. All stations hiked to $3.999 Friday, but then came back down to $3.899 today which is Saturday. This is in the Traverse City, MI area. The spike line is $3.92. Or is this a game they are playing with us? I got gas Friday before all stations hiked at $3.809. There was a line of 20 cars at the pumps for Sam’s Club. They had an employee directing traffic to the pumps.

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