Posted in: Forecasts,
by Patrick DeHaan on Mar 3, 2010 12:47 PM
I don't have much spring fever, but oil and wholesale gasoline prices sure do! In the latest round of DOE data, we're told that oil inventories increased a whopping 4.1 million barrels. Obviously we don't pump oil into our tanks, but gasoline inventories also rose 700,000 barrels. After the report was released, oil prices were seen rising back above $80, to nearly $82.
The dollar has seen some weakening this week, with the latest look showing one euro worth $1.373 dollars, rising from $1.35 last week. While the immediate implications are hardly a reason for oil prices to increase to $82, positivity about the situation in Greece has helped the euro.
Meanwhile, back at retail pumps across the United States and Canada, you should expect to see prices start to increase significantly compared to just a few weeks ago. The U.S. average sits just north of $2.70 at this writing, while prices in Canada have settled to 102.6c/L. Prices in both countries can be expected to rise, especially with the likelihood of a price hike at stations in the Midwest.
I widely expect Speedway/SuperAmerica to increase prices at just about all their stations in Minnesota, Michigan, Illinois, Wisconsin, Ohio, Indiana, West Virgina, and Kentucky. Prices in Michigan, Ohio, and Indiana will likely rise to $2.75-$2.85 by noon tomorrow, while the states outside that area could see prices increase to just under those levels, depending on market. Speedway retains a significant market share of gas stations in Michigan, Ohio, and Indiana, thus the reason for such accuracy in prices for tomorrow.
The rest of the nation will also see rising prices, with the U.S. average increasing to $2.75-$2.79 by the start of next week.
Also pushing prices higher was news that ExxonMobil's huge Baytown, Texas refinery suffered an error, going offline early this morning. Exxon has since said there have been no impacts on production, but the market remains alert to refinery issues this time of year as facilities begin ramping up output of cleaner-burning Summer fuels. Holly also reported a fire at its facility in new Mexico on Tuesday night, adding to concerns.
Prices on the West Coast have seen support as refiners being booking shipments to Chile, where prices have risen and margins are better, thus decreasing available supply to the West Coast and driving up spot prices.
If you aren't ready for an increase in gasoline prices, this is your warning. Prices look likely to rise from here on out as oil has seen support around $80/bbl.