Maybe we could give up gasoline for lent. While gas prices have only gone up 32 days in a row, not 40, it feels as if we all are paying some penance. Gas prices have risen 43 cents a gallon according to Triple A and have not looked back since Jan. 17. Gas prices soared on a combination of factors from Hurricane sandy out east and the Richmond refinery fire on the West coast and of course the ongoing saga surrounding the reversal of the Seaway pipeline. With some refiners going into maintenance early due to the aforementioned problems there is more talk about a tightness of gasoline blending components that help produce those summer blends of gasoline that we all know and love. According to Barbara Powell of Bloomberg it seems that some of the heavier crudes that are available don’t exactly pack the same punch when it comes to the production of these higher quality blends.
Then you have the refiners having to balance the reduction of supply of winter blend versus rebuilding of the new blends. Refiners in California that had to run overtime to make up for lost production after the Chevron fire in Richmond California.
Oil prices of course are knocking on the lower end of the trading range, which gives us hope that the historic run in gasoline should start to slow. Oil Prices seemed to get even weaker when European Central Bank President Mario Draghi warned that the economic outlook for EU continues to be weak but does expect a gradual recovery later this year. Not exactly the type of comment that is going to conjure up visions of sizzling European demand.