Tag: Hurricane

Ed- do we think too much alike?

Just seeing Ed’s post made me think back to the prediction earlier in the year about when gas will hit $4 a gallon. I said with haste that would occur on September 16, 2008, as we’ll be in the middle of Hurricane season. With any luck or miracles, maybe we won’t have as active of a season again this year.

Anyway, the Dollar is slowly gaining strength, the European Central bank is poised to lower its own interest rates, therefore losing precious value of the Euro… how long will it last?

The Dollar has been on the up side a week or so. Economists believe if any recession does exist it would be a shallow and fast moving event.

Anyway, I don’t know that $3.75 is the magical number, given that this year’s run-up in prices has been significantly higher, but I still debate myself as to whether we’ll see $4 a gallon this Spring.

Patrick

I hereby state that the 2007 hurricane season is done

With absolutely no meteorological reasoning, I declare the end to the 2007 hurricane season. Now- the “official” hurricane season runs until November 30, but with the current conditions unfavorable for hurricane development, I should say that the 2007 saw no major hurricanes hit the U.S. (in terms of catastrophic damage) yet oil prices are at the highest level ever recorded, along with the highest prices ever on record for diesel fuel.

Here is a Winter prediction: we’ll see gasoline prices remain high until a week or two after we get the first 35″ of snow for the 07/08 season, or until we have at least 6″ of snow on the ground. What’s behind this reasoning? Well, we likely won’t see this happen until January or February, and most refiners should be well out of maintenance by then, easing the demand crunch behind gasoline (and especially diesel) and things should calm down overseas.

Until then, hold on- things will continue to be rough, and we COULD see retail diesel in the Grand Rapids area hit $4/gallon.

Who’s ready for winter? I sure am! Let it snow!

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Bad news, Grand Rapids! Autumn refinery work centered on Midwest

From CNBC.com (and The Toledo Blade below):

Midwest oil refineries are planning a heavy load of maintenance this autumn that could keep fuel supplies in the heartland tight through the rest of the year, according to a Reuters survey released Thursday.

Other regions of the United States, however, could see a lighter-then-normal fall maintenance season after many plants completed their overhauls earlier in the year — taking some of the pressure off thin fuel stocks in the world’s biggest energy consumer.

U.S. gasoline supplies are running about 8 percent below last year’s levels due to the persistent refinery outages, with Midwest stocks 9 percent below a year ago, according to the most recent government data.

Experts said the focus of refinery maintenance in the Midwest region comes after plants in the area kept running to take advantage of sterling profit margins while other refineries continued a prolonged recovery from coastal hurricanes in 2005.

“The Midwest has hung on for so long after Katrina that there is a lot there that never went down,” said Mark Routt, an analyst with consultancy group ESAI in Massachusetts.

September is expected to be the heaviest month for Midwest refinery maintenance, with 351,000 barrels per day of the region’s 8.27 million bpd of crude distillation capacity scheduled to shut.

Supplies of gasoline and diesel in the northern tier of the Magellan Pipeline, which runs from Houston to Minnesota are expected to be extremely constrained as two of top refineries are seen going out concurrently.

Perfect.

From The Toledo Blade:

One of the metro Toledo’s two refineries is to be shut down for routine maintenance lasting about two months, starting in about three weeks, people familiar with the operation who asked not to be named said yesterday.

BP PLC is to close its suburban Toledo operation in mid-September, eliminating production of 155,000 barrels a day of regular gasoline and diesel, as well as kerosene, aviation fuel, and some other products, the people said. It supplies BP stations and others selling under different brand names.

The plant generally supplies Ohio and provides products for Detroit. Although BP officials declined to discuss the temporary closure, the planned shutdown likely means the company will buy gasoline supplies to serve the state.

It is unclear whether the work will have any affect on area vehicle fuel supplies or on gas pump prices.

Such maintenance overhaul typically takes place about every four years and often takes about eight weeks to finish.

Jeff Hazle, technical director for the National Petrochemical and Refiners Association, said he did not know specifically what BP might be doing but said such work typically involves inspecting pipes and vessels, replacing equipment, and possibly adding technology to improve performance.

Thats JUST the news I couldn’t wait to hear. 🙁

🙁

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Holy smokes! Another huge loss for gasoline!

Gasoline wrapped up the day down another whopping 7-cents! This is the lowest price we’ve seen in months, and should be enough to warrant prices down to 2.60s, PENDING tomorrow’s DOE report. This could be a great week for huge losses in gasoline prices- if the DOE report tomorrow is good, look for the market to shed another 3-8 cents! If its bad, look for buying to the tune of a 3-5 cent uptick.

Of course, we can’t get the prices to come down at the pump, but if they did, we would be sitting at about 2.85 today.

Look for prices to continue to moderate, pending hurricane activity in the Atlantic.

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Hurricane Dean threatens Mexico… wholesale prices nosedive!

With Dean on a much more southern track than initially thought, wholesale prices of gasoline has taken a large hit overnight, mainly on relief that this huge hurricane will miss most of the U.S. oil and gasoline infrastructure.

As we sit now, wholesale gasoline prices have backed off a whopping 7.43 cents per gallon overnight. The selling could easily accelerate once trading becomes more active this morning.

I’ll have a wrap up later this afternoon if necessary.

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Prepare for a re-hike!

Benchmark station in Indiana that was able to set me off to yesterday’s hike re-hiked again today to $2.86!

I’ll look for that to filter up to Grand Rapids here in the next day or two at latest. I estimate the next hike will take us to $2.99 or so.

With hurricane news hitting the airwaves, we can, as previously said, expect traders to buy more long positions, thus driving the wholesale price of gasoline up.

AND, hopefully, nothing heads for the Gulf. If it does, we’re in trouble.

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