REUTERS/Fred Prouser
Actor Charlton Heston (L) waits beside his black Corvette sports car, as a gas station attendant services his car April 23 in Hollywood.
This has been a headache to the American driver, and economists are worried about what it could do to spending.
Unfortunately, it could be a little while before we see some relief at the pump.
In a new note today, fuel markets guru
First off, the Quebec crude freight train disaster has complicated ongoing east coast refinery outages:
...two Friday’s ago the rumor-mill was churning out the notion that the recent spike in mogas was the result of Irving Oil securing delivery commitments after the catastrophe at Lac-Me´gantic cut off crude shipments to the company’s 299 Mb/d St. John (Canada) refinery.
To this effect, on Friday Irving reportedly shut down units at this refinery. This news compounded the recent unplanned outages at Phillips 66 Bayway, NJ facility and Philadelphia Energy Solutions South Girard refinery.
Schork also believes the rising cost to refiners of the renewable fuel standard — a topic we also discussed — has filtered into prices:
Add to this the 1,800% spike in RINs and the attendant incentive to export mogas rather than pay the EPA’s vigorish, and all of a sudden, gasoline supplies around the NYMEX NYH terminal complex look challenged.
Result: more pain —
Of course this is going to translate (should these prices prevail) into higher gasoline prices for consumers. For example, over the previous three summers a $0.01 per gallon increase on the NYMEX has translated one month later to a $0.009 gallon increase in pump prices. NYMEX RBOB for August delivery has rallied by around 46 cents this month.
Given that AAA gasoline was at $3.474 over the 04th of July holiday, pump prices could be pushing up against $3.900 by the Labor Day holiday.
Yuck.