There’s no question about it, oil prices are high. And naturally, oil companies will use whatever excuse they can find to raise them. Having said that, has anyone thought about the price of bottled water? Go to any local grocer and look at the prices of bottled water. If one thinks about it, when compared to gasoline and all the work that goes into making gas from crude oil, transporting it, etc., gasoline is a bargain.
And if you really want to get ripped off, go to Starbucks! People have no issues with paying upwards of $3 for a cup of coffee! In fact, millions of Americans go to Starbucks on a daily basis and pay 400 to 500 percent mark-up on coffee, and don’t even blink.
When compared with bottled water and Starbucks coffee, gasoline is a bargain.
By the way, I don’t work for oil companies. Just stating the facts… TGO
Refer to story below. Source: Reuters
HOUSTON (Reuters) – A hurricane in the heart of the U.S. energy industry is expected to upend years of U.S. excess oil capacity and low prices, with the impact expected to reverberate globally and affect energy markets for weeks.
Harvey hit the Texas shore as a fierce Category 4 hurricane, causing massive flooding that knocked out 11.2 percent of U.S. refining capacity, a quarter of oil production from the U.S. Gulf of Mexico, and closed ports all along the Texas coast.
Gasoline futures jumped as much as 7 percent to their highest level in more than two years in early Monday trading in Asia as traders took stock of the storm’s impact.
The outages will limit the availability of U.S. crude, gasoline and other refined products for global consumers and further push up prices, analysts said.
Damage assessments could take days to weeks to complete, and the storm continues to drop near-biblical amounts of rain as it lingers west of Houston, home to oil, gas, pipeline and chemical plants.
More than 30 inches (76 cm) fell in the Houston area in 48 hours and a lot more rain is forecast, according to the National Weather Service.
“This is not like anything we have ever seen before,” said Bruce Jefferis, chief executive of Aon Energy, a risk consulting practice. It is too soon to gauge the full extent of Harvey’s damage to the region’s energy infrastructure, he said.
The storm was felt from coastal ports to inland oil and gas wells. Oil producers in the Eagle Ford shale region of south Texas have halted some operations.
At least four marine terminals in the Corpus Christi area, an export hub for energy deliveries to Latin America and Asia, remained closed due to the storm.
“We just simply don’t know yet the damage all this rain will have on Houston’s energy infrastructure,” said Andrew Lipow, president of energy consultancy Lipow Oil Associates LLC.
Texas refineries could be offline for up to a month if their storm-drainage pumps become submerged, he said.
As the storm churned towards Texas on Friday, U.S. gasoline futures <RBc1> rose to their highest level in three years for this time of year. Those gains came even before several large Houston area refiners, including Exxon Mobil Corp <XOM.N>, halted some operations.
Exxon closed the second largest U.S. refinery, its 560,500 barrel-per-day (bpd) refinery in Baytown, Texas, complex because of flooding. Royal Dutch Shell Plc <RDSa.L> also halted operations at its 325,700-bpd Deer Park, Texas, refinery. The refinery may be shut for the week, it said.
Flooding on highways between Houston and Texas City nearer to the coast led Marathon Petroleum Corp <MPC.N> to cut back gasoline production at the company’s 459,000-bpd Galveston Bay Refinery in Texas City, said sources familiar with plant operations.
Marathon Petroleum <MPC.N> employees were unable to drive to work and conditions at the plant forced the company to reduce gasoline output, said industry sources. Marathon spokesman Jamal Kheiry declined to discuss plant operations.
Not every plant in the region was hit. Operations were stable at the largest U.S. crude refinery, Motiva Enterprises’ [MOTIV.UL] 603,000-bpd Port Arthur plant, the company said.
Motiva double-staffed the refinery’s crew ahead of the storm, as did Total SA <TOTF.PA> at the company’s 225,500-bpd Port Arthur refinery, said sources familiar with plant operations.
Coastal refineries in Texas account for one-quarter of the U.S. crude oil refining capacity. All of those refineries have been impacted by Harvey since Thursday when refineries in Corpus Christi, Texas, shut in production ahead of the storm’s landfall on Friday.
Colonial Pipeline, the largest mover of gasoline, diesel and other refined products in the United States, said its operations had not been affected by Harvey. Any disruptions to the conduit would send prices across the U.S. Southeast and Northeast soaring. Traders have been keeping a close eye on whether there will be an outage at the pipeline.
Citgo Petroleum Corp [PDVSAC.UL] and Flint Hills Resources [FHR.UL], two of the refiners that closed last week as the storm approached, did not provide updates about the status of their Corpus Christi refineries on Sunday.
(Reporting by Ernest Scheyder; Additional reporting by Devika Krishna Kumar in New York; Editing by Gary McWilliams and Sandra Maler)
