Gas prices are spiking after the biggest US refinery shuts down

[workinclasszero]

Gas prices are spiking after the biggest US refinery shuts down
Akin Oyedele 2h

Gasoline prices were surging again Thursday amid refinery closings in Texas caused by Hurricane Harvey.

Gas futures for September delivery were up 12% to $2.11 a gallon at 10:40 a.m. ET. In their eighth straight day of gains, futures are on their longest rising streak in four years, according to Bloomberg. Futures for October delivery also rallied.

Motiva's refinery in Port Arthur, Texas, which is the largest refinery in the US, shut down Wednesday as floodwater rose. And on Thursday, Colonial Pipeline, which owns the largest pipeline for gas distribution in the US, had planned to shut down its gasoline line because Gulf Coast refiners were unable to process crude oil, Bloomberg reported.

http://www.businessinsider.com/hurricane-harvey-gas-prices-shortage-2017-8

[ProfessorGAC]

1. 22 Cents In A Day Here

And, of course, we have two major refineries within 20 miles of where we live. But, since they commoditized refined gasoline, there is no competition on price so everyone pays the same amount. Big joint in Houston shutters temporarily and everybody's gas price goes up.

[workinclasszero]

2. Yup I bet it jumps up all over the country

The oil companies never need a good excuse to do it anyway and now they can blame Harvey.

[ProfessorGAC]

12. Oil Companies Are Actually Not To Blame

It's the commoditization of refined product. Now, speculators start buying 30, 90, and 120 day futures, and the folks that had the "rights" to buy at the earlier price are selling their short term futures at elevated values.

Someone bought futures at !.65. Now supply falls so they can sell for $1.80. (About 9% in 90 days)

The people who buy at $1.80 are already buying from their models at $1.90, so they pad their yield with some percentage of 10 cent cheaper rights. Then the daily price hits $2.

The oil companies make more because the market price went up. They didn't actually have to do anything. And two layers of speculators make 7 to 10% in 10 to 90 days.

And the consumers pay at the pump.

[bullwinkle428]

3. Spiking gas prices will do WONDERS for Chump's approval ratings,

just like they did for Shrub in 2005!

[workinclasszero]

5. Well the asshole takes credit for Obama's economy

This disaster and its aftermath is all on Don the con and his fu**ing party!

THANKS TRUMP!!

[Luciferous]

4. Just filled up and it's up about a quarter here.

[workinclasszero]

6. Bout the same where I'm at as well

[egold2604]

7. up 20 cents - $2.95 a gallon for High test

[workinclasszero]

8. High gas prices will be a giant drag on

the economy.

Wonder if they will fall back by the end of the year?

[B2G]

9. Most likely, if the Gulf escapes more storms.

These things are typically pretty short lived.

[workinclasszero]

10. I hope you are right

I drive 50 miles a day, 5 days a week for work.

I'm just glad my rollerskate car gets 35 to 40 mpg.

[B2G]

11. Yep. But it's barely September.

I would guess things will be back to normal in a couple of months at the latest.

[ProfessorGAC]

13. I Agree With B2G

The overall market is pretty static, so that's why the speculators love these big events. A chance to swoop in and make some profits their models didn't predict.