Every day we sweat the gas price out on the streets of a runaway American dream, at night we ride through at the mercy and glory of these refining machines. Prices are rising out on highway 9, chrome wheeled, fuel injected, and prices continue to climb. Oh, baby this gas rips the bones from your back. It's a death trap, it's a suicide rap. We gotta get out while we're young. 'Cause tramps like us, refineries were born to run.
1-2-3-4! The highway's jammed with broke drivers on a last chance power drive. Everybody's out of gas tonight and there is no place left to hide. Together perhaps we can live with the gas price, before the effect on growth take its toll. Oh, Someday soon I don't know when, we're going to get to that place where we can power our cars with the sun! But till then, tramps like us, baby refineries were born to run.
A surprise increase in refinery runs was not enough to overcome fears of more refinery shut downs and glitches as refineries close and run below historical norms. Refiners are not running. Gas prices that already were at the highest level since August as refinery outages, scheduled maintenance and plant closures in North America and Europe increased supply fears. We saw a spike when ConocoPhillips planned to shut the fluid catalytic cracker at its Bayway refinery in New Jersey not to mention the earlier closures of a couple of Pennsylvania refineries and the closure of the big Hovensa 350,000-barrel-a-day St. Croix plant in the U.S. Virgin Islands. Still gasoline paused a bit when the Energy Information Agency reported that US refiners operated at 82.8 percent of their operable capacity last week which was higher than expected especially against a backdrop of poor margins and a Motiva glitch gasoline production managed an increase averaging 8.6 million barrels per day.
Yet a report from Barbara Powell of Bloomberg News showed how sensitive prices are at this time of low runs. She reported that Citgo Petroleum Corp. will shut most of the production units at its refinery in Lemont, Illinois, near the end of April for planned repairs. The equipment includes a crude unit, coker, fluid catalytic cracker and alkylation unit, said the people, who declined to be identified because they aren't authorized to speak for the refinery. The shutdown will occur when gasoline from the Midwest and Gulf Coast will be in demand and the East Coast will need more fuel imports because of refinery shutdowns in Pennsylvania, the Virgin Islands and Europe. The refinery, which serves the Chicago-area market, can process 170,500 barrels a day of crude oil.
So gas prices are in danger of another surge and will have to keep pace with rising oil prices. Oil is ignoring data that China's inflation is rising at faster-than-expected rate of 4.5% in January from the year-ago period which reduces the chance of a loosened monetary policy. Instead we are focusing on renewed hopes of a Greek austerity deal. This comes as OPEC crude production hit a three year high in January as Libya, Kuwait and Iraq boost output. Bloomberg says that supply from OPEC increased to 30.9 million barrels a day last month, the group's Vienna-based secretariat said today in its monthly oil market report. That's the most since October, 2008 and is up from 30.84 million in December. That comes as they cut their demand forecast by 120,000 barrels a day, to 88.76 million a day. They project that demand growth will slow to 900,000 barrels a day in 2012 from 1.0 million last year. OPEC's output levels are exceeding requirements by almost 5 percent.
Producing more as demand is falling! Getting ready for some action in Iran perhaps? We like the ranges! Call to get my trade levels at 800-925-6487 or email me - Phil Flynn - at email@example.com. Get the Power to Prosper and me every day! Tune into the Fox Business Network!
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