[Rushtalk] Bend over summer gas is coming

John Quayle blueoval57 at verizon.net
Fri May 25 13:35:12 MDT 2018

/*$3.19/gal here in the Pittsburgh-area...........was $2.63 as recently 
as March. */

On 5/24/2018 12:24 PM, Carl Spitzer wrote:
>     *Market Insider *
>   *Gasoline prices could see summer spike, with prices at 4-year highs
>   and record demand*
>   * *Gasoline prices are expected to reach $3 as a national average
>     for unleaded gasoline this summer, a four year high. *
>   * *But there are heightened risks gasoline could spike higher on a
>     geopolitical event or some other issue, given the fact demand
>     should be at record highs and refineries are running full
>     throttle.. *
>   * *The average family could pay several hundred dollars more for
>     fuel during the summer driving season May through September. *
> *Patti Domm | @pattidomm * *Published 3:34 PM ET Fri, 11 May 2018 
> Updated 7:25 PM ET Fri, 11 May 2018 CNBC.com*
> ** *Patti Domm | CNBC* *A Sunoco gas station showing rising gas prices 
> in New Jersey.* *Already expected at four-year highs,gasoline prices 
> could be be especially vulnerable to spikes this summer, with demand 
> at record highs and refineries running full throttle.*
> *Gasoline prices are expected to peak at a national average of around 
> $3 per gallon by the Fourth of July holiday. But with summer driving 
> season officially kicking off on Memorial Day about two weeks from 
> now, the average price of unleaded gas is already at $2.85 a gallon, 
> according to AAA.*
> *Nineteen states are already above the national average, with nine 
> averaging above $3 a gallon, and California heading toward $4 per 
> gallon. Drivers in 25 cities are already paying 70 cents a gallon more 
> than this time last year, according to GasBuddy.com.*
> *"In recent weeks, we've seen 10 million barrels a day of gasoline 
> production. It continues to run very high. You're not talking a lot of 
> breathing room. If there's a big refinery that goes down in the heat 
> of the summer driving season, you can still expect a pretty big 
> reaction," said Patrick DeHaan, senior energy analyst at GasBuddy.com.*
> *show chapters * *Average family to pay $200 more for gas: Expert    
> 4:37 PM ET Tue, 8 May 2018 | 02:25* *But it's not just the potential 
> hiccups at domestic refineries and pipelines, and even summer 
> hurricanes that analysts say could threaten to send U.S. prices even 
> higher. It's the fact that for the first time in a while, geopolitics 
> has been driving oil prices higher.*
> *With oil prices at a four-year high, gasoline prices are climbing 
> too, and analysts are carefully watching developments with Iran in the 
> Middle East and the continued decline of Venezuela's oil production.*
> *This summer, the average family could pay about $1,318 for gasoline 
> from May through September, compared to $1,070 in the same period a 
> year ago, according to Tom Kloza, head of global energy analysis at 
> Oil Price Information Service.*
> *In 2014, when gasoline prices were last at $3 per gallon, the average 
> family paid about $1,600 for the summer season. Drivers this year, 
> however, should see the national average peak at about $3 to $3.10 per 
> gallon, but not stay at or above that level as they did in 2014, Kloza 
> said.*
>         *State-by-state gas prices as of May 11*
> /*Source: AAA*/
> *Gasoline demand, meanwhile, was at a high 9.8 million barrels last 
> week, just shy of the record of 9.86 million barrels, and it is 
> expected to rise during the summer. Analysts say low unemployment and 
> tax breaks could be pushing up demand as more people drive to jobs and 
> vacations.*
> *"Certainly, we could see several weeks this summer where gasoline 
> demand is in excess of 10 million barrels a day…We could see new 
> weekly records set this summer," said Andrew Lipow, president of Lipow 
> Oil Associates. Refineries are running at a high level, and 
> utilization has been running over 90 percent.*
> *Gasoline prices have been rising steadily, with the national average 
> up about five cents per gallon in the last week and 20 cents in the 
> past month. Last year, at this time the average was $2.33 per gallon, 
> according to AAA.*
> *The highest prices ever for unleaded gasoline were in the summer of 
> 2008, with national prices for unleaded averaging $4.11 per gallon. 
> Oil that year spiked above $145 per barrel, double current levels.*
> *Fuel prices have been climbing this year, along with crude, which is 
> up about 18 percent year-to-date. Oil prices have jumped recently as 
> President Donald Trump moved to withdraw the U.S. from the Iranian 
> nuclear deal. Trump dropped out of the agreement this week, and 
> shortly after, there was the first direct military confrontation 
> between Israel and Iran, with Iran aiming rockets at Israeli forces. 
> Analysts said if that type of activity continues or intensifies, it 
> could drive crude —and gasoline —prices even higher.*
> *West Texas Intermediate crude futures Friday were at about $71, up 
> more than 3.5 percent in the last two weeks. Gasoline futures were up 
> about 6 percent in the same period.*
> *"It's possible I would say we could have a spike if the tensions in 
> the Middle East heat up to the point where it begins to impact crude 
> oil supplies. If that's the case, the oil market would respond 
> accordingly, and you could see $3.50 a gallon for gasoline," Lipow 
> said. "I would say the probability is less than 25 percent, but that 
> could easily change."*
> *Venezuela's dwindling production, now at about 1.5 million barrels a 
> day, is about 1 million barrels a day less than last year, and more 
> declines are expected.*
> *The future output of state-run Petroleos de Venezuela, called PDVSA, 
> is even more unclear now that ConocoPhillips is seeking the company's 
> Caribbean assets in return for a $2 billion arbitration award related 
> to Venezuelan's seizure of Conoco assets in 2007.*
> *A number of ships headed for PDVSA Caribbean operations recently have 
> been diverted to avoid seizure of their cargoes. Other companies are 
> expected to lay claim on PDVSA assets, including Canadian miner Rusoro 
> Mining which is seeking Citgo assets.*
> *"We're looking at a possible implosion, not only of their crude oil 
> exports, which are pretty low but of their refineries. Maybe they're 
> operating at 30 percent of capacity," said Kloza.*
> *He notes that PDVSA was a chief supplier of fuel in Central and South 
> America but its problems might mean the U.S. steps up to be "a larger 
> supplier if things continue to get run down in their refining 
> operations."*
> *The U.S. exported 1.9 million barrels per day of crude last week, and 
> another 4.8 million barrels of refined products, including 581,000 
> barrels a day of gasoline. The U.S. also imports some gasoline into 
> the East Coast from Europe and Canada, but it has become a net 
> exporter of refined products with a substantial amount of diesel exports.*
> *"The U.S. is now exporting more crude oil than Venezuela," GasBuddy's 
> DeHaan said. "That's a stark turnaround. Even a year ago, it just 
> seemed impossible…That's a situation that's not going to be reversed."*
> *Kloza said if oil prices do spike, Trump can release oil from the 
> Strategic Petroleum Reserve or press Saudi Arabia to return some oil 
> to the market.*
> *U.S. oil drillers continue to increase their output, but Kloza said 
> inadequate pipeline capacity is one factor that could limit the 
> increase of U.S. crude. U.S. production is continuing to grow, hitting 
> a record 10.7 million barrels a day last week and is expected to top 
> 11 million by year end.*
> *But Kloza said the U.S. also produces light sweet crude, while the 
> Gulf Coast refineries process heavier crudes, like that from Venezuela.*
> *"We have just too much light and sweet. That's why we're going to be 
> exporting it to places like China and India, and in some cases here to 
> refineries that can run more light crude. This is why Venezuela is 
> such a big deal," he said.*
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