When I agreed to contribute here, I said, “Sure, I can write an post a week!” The market is pushing me towards a daily contribution. The loss of the crude distillation unit at BP Whiting has wreaked havoc on the Midwest markets. As of this post, Chicago CBOB was up 60 cents and RBOB was up 65 cents. Without some crazy market reverses, I don’t see how we will avoid another price hike this week. A simple addition of today’s market increases and today’s spike prices across the Great Lakes region puts us above the $3 mark. If you haven’t topped off yet, today’s spike price may start to look pretty good by mid-morning tomorrow. -TS
Is that an ADDITIONAL 60 cents??
Good grief.
The last time Whiting took a major dive and gave Indiana prices similar to California, the southern boyz came to the rescue and sent gas up our way through whatever pipelines.
An additional 60 cents may cause the Cincy area to crack $4 bucks a gallon since it was already higher than the rest of the state right ChrisDG74?
Looks like Whiting went down in March this year, plus we had a strike.
January 2015 it went down.
Fire in Aug 2014, minimally impacted but gas spiked because of it.
July 2014
April 2014
July 2012
March 2012
Most of 2013 it was down because it was being converted to process Canadian crude.
It goes down alot and around the same times. Questions need to asked.
An article I saw on MSN tonight.
http://www.msn.com/en-us/money/markets/opec-just-kicked-oil-into-the-dollar30s/ar-BBlEuHr
This keeps looking worse. They’re anticipating that CDU at Whiting to be down for a month.
http://www.reuters.com/article/2015/08/11/refinery-operation-bp-whiting-idUSL1N10M15N20150811
Tim…
I’d be shocked if a price hike was avoided Wednesday.
$2.49 Spot….$3.15 gas by Friday
So, what size squirrels or natural disasters would it take to shut down a 5$b Intel or Samsung fab for a month?
When the Whiting expansion was being sold it was explained it would bring price stability in the gasoline market and would bring reliability to the refinery. Well we all know now both statements were lies! So who is going to be held accountable? Probably nobody. Seems these midwest refiners get together and throw their names into a hat and whoever is pulled out first goes down. This week the news has been full of stories how the price of gasoline will be below $2 by the end of the year. I thought to myself the refiners will never allow that to happen and here is the first shoe to drop with more to follow. When is fall maintenance supposed to start?
$3.299 in sw Ohio for sure. The timing of these “issues” foes make me want to dust off my tinfoil hat.
Turbo, these squirrels must have somehow been involved with Atomic fallout and mutated like the giant grasshoppers, ants and gila monsters in those cheezy ’50s movies.
We were able to get both cars filled early this evening for $2.37, in the Lawrenceburg-Aurora, INDIANA area, of course. I know we will get hit something terrible but I hope we have no more “Cincinnati Surcharges” like today and last week.
So, once again, during a downward slide in prices nationwide, we will not only miss out on a whole month (probably at least) of it, but we get a BIG PRICE HIKE during the time we miss out. I’ve experienced this way too many times not to be cynical.
It’s easy to get cynical, but let’s not overlook that nearly every station in Ohio was under $2/gallon just six or seven months ago.
While things happen and often do look suspicious, let’s not trick ourselves out of reality here.
To add to Indy2door, I’m sure the one that goes down gets kickbacks from the other refiners when they begin to sell their product at the criminally high profits they are going to get. If this was someone other than the oil companies the Justice Dept would be all over it.
Tim,
Thank you for jumping in and helping all of us consumers out! 🙂 I appreciate it. Now hold on a sec while I go fill my tank! Haha
I’m not buying into the conspiracy theories. They have no reason to “try” to go down and push the margins up because with crude down so low and demand rising so high this summer, they were already quite healthy. BP especially will lose out big on this, and other midwest refiners (especially our friends at Speedway/marathon, or marathon, or whatever the company is split into now) will be raking in the cash. If anything, I feel bad for the small independents that have to buy on the spot market that are going to get horribly squeezed in all this. Lucky for those that reside in Wisconsin that have the minimum markup laws that will help them stay in business (and keep prices stable and relative to the market conditions rather than the whims of Big Red)
Em . . . . Oil is plummeting. Em . . . . Seems that the oil companies are fabricating a reason to gouge the American public again regardless of fall oil prices. Why? Because they can and we or our government allows them to do so for the past 10 years. d
Saw a $3.19 in Indy. New reality?
Jrunner, great comment.
Crap happens sometimes, and we all need to just accept it and deal with it without bringing up the same lame accusations every time.
I repeat the points I made earlier….
In Japan after they shut down ALL reactors prices only went up 30% over 4 years.
What kind of bad thing would need to happen to stop production at a wafer fab for a month?
And the track record of Whiting is not encouraging.
While I think it’s coincidence, will it also be coincidence if cheap gas flows north say, in November?
When Whiting has issues so often, is it any wonder some coincide with downward pricing in the rest of the market? Thus the definition of coincidence.
Just filled up for $2.68 in NE Grand Rapids. The first time in a long time I’ve spent >$50 in one transaction at the gas station. Probably since around Christmas last year.
Speedway appears to be setting prices to $2.89 across most of OH. In southwest Ohio, we appear to be getting $2.99.
Hope you filled up last night…
Yes, $2.999 in sw Ohio.
$2.99/gal for Grand Rapids MI
Maybe this will help BP:
http://m.nwitimes.com/business/local/exorcism-planned-for-bp-whiting-refinery/article_5afa5f4e-5839-5cf1-a07e-180efe3d169d.html?mobile_touch=true
$3.399 on Hebron, IN. That’s 90 cents since yesterday morning. Family Express ain’t a bit bashful.
2.99 in Kazoo area now. Do we dare say a 3fer week?
Glad we gassed up yesterday. The $2.99s are spreading in Cincinnati like prickly heat.
Like I’ve been saying all day, if the company I work for had as many problems as the Whiting refinery, we would probably be out of business.
$2.99 is spreading like wildfire in Indy too, up from $2.59 yesterday.
The irony is that other dealers matching Speedway’s price probably are losing money, at least that would be true in the Chicago market where they went to $3.19 Marathon Petroleum can make profits on refining or on retail. They’re making a ton on refining today so they can lowball (hard though it may be to believe) their retail price. Other dealers pricing gas at $3.19 after today’s delivery will be losing at least a dime a gallon here. Speedway puts the squeeze on the competition.
Anyone know the record for most price jumps in a week?
South Bend IN – 2.29 to 2.59 yesterday, now going to $2.99
I can tell you we had 3 jumps in 3-4 days back in 2008.
When hurricane Gustov(?) rolled through Houston, Cincy jumped Saturday, Sunday, and a lot of stations jumped Monday or Tuesday. Prices were around $3.49 Saturday am. By Tuesday, they were $4.29. That was the last gasp before prices dropped to under $1.50/gallon at the end of 2008(along with the stock market tanking).
Well with all these big spikes now, maybe they’ll be gentle with us and not spike prior to Labor Day weekend. Of course gas will be $3.59 by then. Once Whiting is back on line and Turbo has killed the rampant squirrels up there, I wonder how many days (or weeks) it will take for prices to normalize back to the low $2 range?
Up 90 cents within 2 trading days of the report. You know full well, that once everything is back online, spot prices won’t come back down anywhere near that much in the first 2 days…..
Kroger in Warren, MI was 2.35 yesterday morning when I filled up. Today it’s at 2.99. That’s ridiculous; much like most of Ren’s comments! Common sense escapes some people!
$2.18 Monday afternoon in Fort Wayne. Filled up two cars. Today, $2.99. In the space of about 24 to 30 hours, up 81¢. On a daily basis, that’s about 10¢ shy of the all time Fort Wayne record of 50¢ in one day. But it’s a new record for two cycles, in 36 hours. I knew I should have taken that 6 gallon can for the mower with me. Oh well.
What I want to know is this:
Assume Whiting is a fifth or fourth of the Midwest capacity. Even a third.
It goes down. Prices skyrocket.
But if we are running at 95% utilization and still have $2.99 gas to sell, without running out, this means:
1. Southern Boyz are instantly shipping cheap gasoline to us schleps and profiting grande.
2. There’s no shortage of gas and it’s all marketing to convince us there really is a shortage.
3. Somewhere hidden there’s a a secret gasoline depot that will continue supplying us at inflated prices
4. The outage is nowhere near what has been described
5. Demand will drop due to high prices
6. Gasoline is shipped but due to shipping in gallon containers via Uber this justifies the 80c hike
Seriously here, where is all this 2.99 gas coming from? If we just lost a huge piece of the pie and other states don’t chip in then????
I live a northeastern town in Michigan (Oscoda) on Monday our gas prices were 2.34 this morning they were 3.12, by 9pm this evening gas went back to 2.99 a gallon. I really do not think they know what they are doing up here!
As a part of what I collect everyday, I keep an eye on Group 3, which is out of Nebraska and a part of the same report that brings me the Chicago CBOB. While our prices have gone up almost a dollar since Friday’s close, Group 3 is up almost 40 cents, while nationally we are up 10 cents.
Racks in the area will have to find their gas from somewhere, and Nebraska is just one place it could come from. I also track some racks in the Chicago/Wisconsin area, and what they have jumped is interesting. Chicago and Rockford are up almost 85 cents, Madison is up 65, and Minneapolis is up 30 cents as of yesterday.
Patrick de Haan said yesterday this could be a week or two, and some closer to BP says it could be a month or possibly more. Last time we saw anything like this was in 2012, around the same time of year. Prices spiked around 50 cents for two months before they started going down, and really didn’t get back to normal until December. We were on a downward trend that would have seen us with an average below $2 by December this year. Now we may spend most of the rest of the year over $3 instead. I’m not much for conspiracy theories, but whether this was a manipulated outage or an accident, someone should pay for this kind of malfeasance. BP, and also Exxon Joliet, Marathon Wood River (St. Louis), and Husky Toledo and Lima all have an outage of some sort all at the same time. Someone, besides the consumer, really needs to pay.
With Spot at $2.51 today we’re probably in store for a 3rd spike this week to the $3.29 range in central Indiana. This morning Indiana ranked 27th in highest gas prices, but I have a feeling the number 2 will be removed and we’ll be 7th before the weekend is out. Thank goodness the Honda Fit gets good gas mileage
If I am looking at the gas charts correctly on GasBuddy, it has been since last October, of 2014, 10 months ago, that we in Indiana were at or above $3.00 gas. So in two days, Whiting has obliterated 10 months of downward gains in pricing. I really wish Whiting was half as consistently productive as it was supposed to be.
Going off of what Chris is saying, the sad thing is, independents that have to buy spot are probably still losing money at $2.99. If anything, Speedway, being the only ones with any clout (other than family express in NW IN) are “helping them out” by raising to $2.99, especially since they DON’T have to buy right now on the spot market and are probably taking advantage of selling also. Despite the close call in detroit a few years ago, is it just me, or does it at least seem like Marathon takes better care of their refineries? Because even though they do tend to go offline, it never seems to be at the same frequency that Whiting keeps happening. Just some food for thought.
Execs will tell you “Hey, you are still 50 cents less on average from this time last year.” Sell a silver lining while they line theirs with gold.
Oh yeah. They were pimping that silver lining on the news last night.
Kind of like peeing on your leg and telling you it’s raining.
Unfortunately we are not out of the woods yet. Spot went up another 9 cents yesterday. Normally that is a red flag but it was almost a relief that the spot went up that “small” of amount after the week we’ve had. But we are at a point that, under the new normal circumstances a spike would be inevitable. Now we have the new, new normal so I don’t know what will happen.
Let’s pour salt in the wounds…gas in a handful or metropolitan areas in South Carolina is under $2.00/gallon.
We need something like this, but for blowing up the consumer market of gas:
http://www.latimes.com/local/lanow/la-me-ln-exxon-mobil-refinery-explosion-20150813-story.html
What you guys forget is that MPC long planned maintenance at their Robinson, IL refinery (STARTED TODAY) that was an overlooked factor. Market knew MPC was going down (and had long had this scheduled) which added insult to injury with BP. BP isn’t making money off gasoline it’s not selling. In addition, MPC Catlettsburg is doing light modifications on a unit, with maintenance scheduled after that (September). This all impacts the psyche when a refinery like Whiting goes down out of the blue.
And FWIW BP doesn’t have a handle on Whiting’s potential time table yet I’m told. More chatter about it being several weeks now.