Posted in: Gas Prices,
by Patrick DeHaan on May 31, 2013 02:19 PM
Motorists in Michigan, Indiana, Ohio, Illinois, and Wisconsin: brace yourselves. You're the next to see your prices spike, and it appears much of the increase is due to a yet-to-be-determined refinery glitch.
Spot gasoline prices, which are used to determine wholesale gasoline prices, and thus retail prices, have jumped sharply in the region. In fact, the only region seeing higher spot prices today is the Great Lakes (or called "Chicago") region. This is due to trade rumors of a refinery "caught" buying gasoline from other refineries. Typically this happens when a refinery suffers an unexpected glitch resulting in lower gasoline production. The affected refinery is then forced to buy gasoline on the market to cover its previous contractual obligations. When word spreads of a refinery buying in this manner, it has a tendency to spook the market, especially amidst an already tight supply of gasoline.
It is for this reason that gasoline prices may begin jumping in the Great Lakes states. In Michigan and Indiana, prices may jump to a uniform $4.09 give or take 10c/gal, excluding NW Indiana, where prices would jump even higher due to summer gasoline requirements. Prices in Ohio and Wisconsin (excluding SE Wisconsin) could jump to $3.99-$4.09 per gallon. In Illinois (excluding Chicago) prices may jump over $4/gal as well. In the Chicago metro, prices could jump 10-20c/gal.
When exactly this spike occurs will vary. It could happen this evening, Saturday, Sunday, or some stations may even wait until Monday. One thing is for certain: if stations buy supplies of gasoline after 6pm today, it's going to cost them a lot more, and they'll be forced to pass that increase along in the form of a price hike.