[Rushtalk] Bend over summer gas is coming

Tom Matiska tom.matiska at att.net
Fri May 25 14:42:40 MDT 2018

Average summer increase since year 2000 blending regulations took effect is 51.7 cents.   Current prices are close to normal and it looks like a robust economy will add a dime or two on the demand side.    Tom
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John Quayle <blueoval57 at verizon.net> wrote:

>/*$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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