Following last night’s Colonial Pipeline explosion which killed 1 and injured several more, Wholesale gasoline prices have spiked most since Dec 2008 to 16-month highs as the closure of the largest fuel pipeline in America forces traders to book cargoes from Europe.
Prices spiked almost immediately – flash-smashing 15% higher before fading back… only to drift back to the highs this morning as reality sinks in…
Dramatically decoupling from Crude prices…
Leaving Gasoline prices at 16 month highs…
As Bloomberg reports, a spill in September closed the Colonial pipeline for 12 days, cutting supplies to 50 million Americans in the Southeast.
Gasoline traders responded immediately to the possible shortages, rushing to book extra tankers for replacement fuel supplies from Europe, according to two shipbrokers directly involved in the trade. Freight costs for cargoes across the Atlantic surged to the equivalent of about $17 per metric ton from about $12.40, according to data compiled by Bloomberg.
The southeastern U.S. is “highly dependent on pipeline supplies from Colonial, and, ultimately, Colonial flows form the baseline of U.S. East Coast supply,” Robert Campbell, head of oil products research at Energy Aspects Ltd. in New York, said in a note. The longer the mainlines are offline, “the more upward pressure will be placed on U.S. East Coast fuel prices, while downward pressure will be exerted on U.S. Gulf Coast product prices.”
The pipeline’s outage in September triggered fuel shortages across the region, causing motorists in cities such as Nashville, Tennessee, and Raleigh, North Carolina to rush to stations to fill their tanks. The shutdown altered international trade flows for fuel deliveries and led to a federal waiver of gasoline-grade rules. The governor of Georgia issued an executive order to reiterate a state law that prevents price gouging.
For the moment, retail regular-grade gasoline prices in states including Alabama, Georgia, South Carolina and Virginia are below the U.S. average of $2.206 per gallon, according to the U.S. motorist organization AAA. The data are from 3:39 a.m. Eastern Time.
http://www.zerohedge.com/news/2016-11-01/gasoline-prices-spike-most-2008-after-pipeline-explosion
“Prices spiked almost immediately…”
Almost like it was planned in advance.
Cause of the explosion? Not a word. Oil speculator, “Hey, we’re back on the “Gravy Train!” “We should have more “explosions.”
Of course our “good buddies” in Europe and the Middle East “gouge us” at our time of need. Prices went from $12.40 a metric ton to over $17.00. The Governor of Georgia issued an executive order to reiterate state law that prevents price gouging.
“If I don’t get my cut, you guys be in deep doo-doo!” (Sarcasim)
Saw another article that said it could open by Saturday…
http://www.reuters.com/article/us-pipeline-blast-alabama-idUSKBN12V2FC
At the pump I paid $1.96/9 last night.
Rocketcity also known as Huntsville, Ala.