Comment on the July 19 prediction: Prices rose twice last week, to $2.45 on 7/21 and then to $2.55 on 7/23. Take the average, and you pretty much have my CORRECT prediction.
Thursday, July 30, 2009, 4:00PM: Uh oh. NYMEX gas prices are up 13 cents a gallon today! Using my formula, a price re-set would be in the range of $2.59-$2.64. I expect this will be the new price on Friday. — Ed Aboufadel
A fire ignited Friday afternoon around 2:30 p.m. at the Tate and Lyle corn refinery plant in Loudon, according to Loudon Police.
Comment on the May 19th posting: Prices re-set early last week to $3.99, as predicted. Then they went up again at the end of the week, briefly to $4.19, but on Memorial Day, we are back to $4.09. So the prediction was CORRECT — Speedway did resist going over $4 as long as possible — but the situation is depressing.
Monday, May 26, 2008, 4:00 PM: I was in Seattle most of last week, so I missed the fireworks on the price signs, but prices are similar in the new Northwest right now. After updating my spreadsheet, it looks like wholesale prices closed Friday at the high of the week, so a move back to $4.19 on Tuesday or Wednesday is possible. If there is silver lining, last year at this time prices topped out at $3.65 and then dropped in June down to $2.88, and prices in June were stable in 2005 and 2006. Also, last week’s pop in the energy markets may have been more due to speculators taking advantage of thinly-traded pre-holiday markets rather than reflecting actual demand. (That’s what I read, FWIW.) I’m not making an official prediction today, but I am hopeful for lower prices over the next four weeks.
BIG SPRING, Texas (AP) – An explosion rocked
an oil refinery Monday in a violent blast that shook buildings miles
away and injured at least one person, the company said. All
workers were accounted for about an hour after the explosion, said
Blake Lewis, spokesman for refinery owner Alon USA. The injured worker
was in the hospital, but the person’s condition was not known, Lewis
said. The fire sparked by the blast was under control Monday
morning, Lewis said. The Dallas-based company does not know what caused
the explosion, he said. The blast sent black smoke billowing into the sky, closed schools, shut down a major interstate and left residents rattled.
“It was extremely scary. You shook you were so scared,” said Laura
McEwen, the wife of Mayor Russ McEwen who lives about two miles from
the refinery. “Our walls shook. It jolted your bed. It was like an
earthquake.” John Moseley, managing editor of the Big Spring
Herald whose downtown office is also about two miles from the refinery,
said, “I thought it would knock the walls down.” Two
elementary schools were evacuated, then classes were canceled at all
nine campuses in the Big Spring school district, assistant
superintendent Carie Dunnam said. The explosion forced open
the doors of the school district’s administration building about four
miles from the plant, Dunnam said. “Literally pieces of my ceiling came on top of my head,” she said.
Bus routes were affected by road closures and that emergency officials
were warning of the potential for more explosions, Dunnam said. Parents
were asked to pick up their children, she said. The refinery employs about 170 people and produces about 70,000 barrels a day. Interstate 20 was shut down near the plant, Big Spring police spokesman Roger Sweatt said. “There’s some fire and a whole bunch of smoke,” Sweatt said. Big Spring is about halfway between Dallas and El Paso.
This sure isn’t going to help the market. Expect more news similar to this to support higher gas prices.
After watching the market the last week, I’m semi-convinced that we’re starting to see the “Spring Run-up” in prices. Last week gasoline traded roughly 20 cents cheaper on the wholesale market, and today, we’re at 2.40+ on the wholesale market. Last year, the run-up began in late January/early February. The question is- how high will we go?
Thats a tough call at this point- refiners aren’t producing much because of the terrible profit margins. Thus we’re seeing refinery utilization rates in the mid-80’s. Yesterday’s DOE report wasn’t the best, supporting the bulls on the market, and with the cold weather, fuel will be in higher demand.
At this point, I believe a national average of $3.50 or more is likely with this year’s run-up. However, the heart of the Midwest produces much of the U.S. supply of ethanol. Will that help keep our prices slightly lower? Perhaps. Usually Michigan is slightly higher in the Spring than the nation, so we’ll have to see. The worst is yet to come, so if you want, fill up all your storage containers, because it will get bumpy!
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Wow… today’s DOE report was a terrific read. I read a lot of good news from this week’s report on petroleum inventories.
As typical, let me highlight some of it:
- Oil inventories rose by 7 million barrels, pushing them into the middle of the average range
- Gasoline inventories rose by 3.6 million barrels, keeping them above the upper limit of the average range
- Huge gasoline gain DESPITE much lower refinery utilization (see cons)
- Midwest (PADD 2) inventories sit at 54.4 million barrels, their highest level since March
- Chicago Discount could slowly work out to market as storage nears its limits
- Refinery utilization slipped to 84.3% of capacity. This is the lowest I can remember in quite some time
- Distillate inventories gained virtually nothing (100,000 barrels)
Overall a good report, with the Midwest PADD being in excellent condition. We can expect to see the Chicago Discount start to appear as storage facilities near their storage limits soon. This could be anywhere from 3 to 7 cents per gallon. I don’t see any reason for a hike at this time.
Prices should work down to possibly as low as the 2.70s. We’ll see!
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