Gas prices still are not really coming down in Chicago or in China. Chicago, the city with the highest gas prices in the nation, also has some of the highest paid public school teachers in the nation. It just makes this Chicagoan feel proud! Well gas prices are going up on yet another pipeline problem, this time the Magellan. That comes as word that refiners in the Gulf Coast are still battling the aftermath of Hurricane Isaac. Gas will continue to be strong and will be the strong part of the energy sector.
Barbara Powell of Bloomberg News reported that Motiva Enterprises LLC expects to need another week to get the main production units running at its Convent, La. refinery, for the first time since shutting Aug. 28 in advance of Hurricane Isaac, according to two people familiar with operations. The effort has been hampered by floodwaters and mechanical issues that prevented the fluid catalytic cracker from being restarted. The two crude units and the H-Oil unit, or heavy-oil cracker, are started and on idle. The alkylation unit, which works in association with the catalytic cracker, is shut because an offsite storage facility for propane produced at that unit is flooded. The Convent refinery is 50 miles (80 kilometers) west of New Orleans. Motiva is a refining and marketing joint venture of Saudi Refining Inc., a subsidiary of Saudi Arabian Oil Co., and Shell Oil Co., a unit of Royal Dutch Shell Plc. Motiva operates two refineries in Louisiana and one in Texas. Kayla Macke, a Houston-based spokeswoman for Shell, said today she doesn’t have an update on the two refineries.
In China the state controlled refineries are desperately trying to catch up with crude prices. Reuters News reports that China is raising the retail price of gasoline and diesel by 6 percent and 6.5 percent respectively to track climbing crude prices, the government said, a move that could help pare refining losses at oil firms. The increase, the second in about a month and the fourth this year, would bring fuel prices close to an all-time high reached in late March. China, the world's second-largest fuel user, cut prices three times in a row between May and July. The higher pump rates may help top refiner Sinopec Corp and number two Petro China trim huge losses incurred earlier in the year.
But they could also dampen demand after the world's second-largest oil user recorded the lowest consumption in 22 months in August as industrial activity in China slowed.