Updates
March 26, 2017: WTI at $48.
December 9, 2015: WTI at $37.
November 27, 2012: well, oil prices haven't gone much higher ... yet.
Later, later: oil prices could go much higher -- senior energy analyst at Oppenheimer. The video is actually pretty good.
Later: Long Island, New York, gas station -- $5/gallon; new worry -- $6/gallon (reference to Hofmeister)
Original Post
Link here here to Oil & Gas Journal.
If another refinery in the northeast shuts down, one can expect an increase in the price of gasoline. Well, duh.
PBF Energy Co. LLC’s October 2011 startup of a previously idled Delaware City, Del., refinery has helped the New England oil products market respond to closures of ConocoPhillips’s Trainer refinery in September and Sunoco Inc.’s Marcus Hook facility in December, the US Energy Information Administration said. But Sunoco’s plans to close its remaining Philadelphia refinery in July could change the situation, EIA warned has warned.The entire article is worth reading in its entirety.
The 335,000-b/d facility accounts for nearly a quarter of the East Coast’s total refining capacity, EIA said. “If the Sunoco Philadelphia refinery shuts down in July 2012, suppliers may need to find 240,000 b/d of gasoline and 180,000 b/d of [ultra-low sulfur diesel fuel] by 2013 in addition to the amounts that have been supplied historically,” it said.
The ULSD gap won’t simply result from lost refining capacity, EIA added. It said New York State plans to require that heating oil meet the same low-sulfur rules as ULSD starting in July, effectively increasing ULSD demand by 70,000 b/d and annual ULSD demand in the Northeast by 20% on average, although the heaviest pressure will occur during the winter heating season.
Two comments: if this happens it will come in the middle of the driving season AND the national presidential campaign.
Second comment: a phenomenon that I've observed over the years that makes no sense will probably follow if another refinery in the northeast shuts down. This is the phenomenon: if there is a shortage of gasoline, regardless of the reason, the price of oil generally goes up. This, of course, makes no sense, if all things being equal, the reason for the shortage of gasoline has to do with refinery under-utilization, then oil is not the problem. In fact, there would be a relative excess of oil. But still, if there's a shortage of gasoline, generally oil rises in price, regardless of the reason for the shortage of gasoline.
So, if another refinery shuts down in the northeast look for the price of gasoline to go up AND the price of oil to go up.