Posted on 02/28/2015 7:40:48 AM PST by thackney
On February 18, an explosion and fire occurred at ExxonMobil's refinery in Torrance, California. The Torrance refinery, the third-largest refinery in Southern California, has about 20% of the region's fluid catalytic cracking capacity and is an important source of gasoline and distillate fuel oil supply for Southern California.
Unplanned refinery outages can have noticeable effects on liquid fuel markets, disrupting supplies of gasoline and distillate, particularly in regions that are tightly balanced, such as the West Coast (defined as Petroleum Administration for Defense District (PADD) 5). When refineries undergo planned maintenance, they make arrangements for alternative sources of supply to ensure that obligations are met. Upcoming planned outages are examined in EIA's Refinery Outages report, released February 26.
However, the sudden loss of production during unplanned outages can sometimes take days or weeks for markets to adjust. As a result, unplanned outages often result in a reduction in supply that causes prices to increase, sometimes dramatically. The severity and duration of these price spikes depend on how quickly the refinery problem can be resolved and how soon supply from alternative sources can reach the affected market.
Bracketed by the Pacific Ocean and the Rocky Mountains, the mainland portion of the West Coast region (PADD 5) is relatively isolated from other U.S. markets and located far from international sources of supply, so the region is dependent on in-region production to meet demand. Additionally, California's more-restrictive gasoline specifications limit the availability of supply from other markets. Mainland PADD 5 has three distinct supply/demand centers near Seattle and the Canadian border, as well as San Francisco and Los Angeles in California. As a result, moving product to Southern California requires longer lead times.
West Coast product markets reacted immediately to the situation at the Torrance refinery. Spot prices in Los Angeles (LA) for CARBOB (California Reformulated Blendstock for Oxygenate Blending) gasoline increased $0.22 to $2.02 per gallon (gal) between February 17 and February 23. Spot CARBOB prices increased from a $0.25/gal premium above the New York Mercantile Exchange (Nymex) Reformulated Blendstock for Oxygenate Blending (RBOB) front month futures contract, a standard pricing basis for gasoline, to $0.41/gal above Nymex over the same time.
This rapid price response is not unusual and is similar to what happened following past unplanned outages. West Coast supply disruptions in 2008, 2009, and 2012 caused spot price spikes that led to higher retail prices. As with previous disruptions, prices should stabilize as more information about the severity and duration of the expected outage becomes available.
Gas is back to normal, it went up about a dollar.
Gas Prices Soar in California as Supply Shrinks
http://abcnews.go.com/US/wireStory/gas-prices-soar-california-supply-shrinks-29282189
Average retail gas prices in the state have surged 25 cents a gallon in less than a week, from $2.98 per gallon for regular on Monday to $3.23 per gallon on Friday. That caps a run that saw the price of regular unleaded go up 60 cents per gallon since Jan. 30 as refineries prepare to shift to a summer blend of fuels....
The situation underscores the frustrating complexity of the gasoline market in California, where state environmental regulations mandate a specialized blend of fuel that isn’t used anywhere else in the U.S.
Because of that, California is economically isolated and can’t easily or quickly purchase fuel from outside the state in a crisis....
A unit of the Exxon Mobil refinery in Torrance that’s critical to producing California-grade gasoline exploded on Feb. 18, causing a fire and stopping new production there while the state investigates. The blast injured four contractors and rained a fine white ash on nearby homes and cars. State air quality regulators confirmed last week that the ash was not toxic.
At the time, another Tesoro oil refinery in Martinez, in Northern California, wasn’t producing oil due to labor unrest.
The two facilities combined make up 17 percent of the state’s crude oil processing capacity, said Gordon Schremp, a senior fuels specialist with the California Energy Commission....
Yeah....2.79 for regular in Oregon again
The petroleum market at the retail gas pump level is like a model rocket.
Pump prices go up quickly but parachute down slowly.
It’s about $3.30 in San Diego.
Oregon is getting the fraudulent carbon tax soon. Another green movement fraud implemented by Kitzahaber and his con artist live in worst lady. He’s out of office because of green fraud but the legislature is going to push it through anyway. It’s a democrat thing.
Yes.... I know.....Oregon dems want us to be bottom of the barrel...
“[California] Democracy is the theory that the common people know what they want, and deserve to get it good and hard.” - H. L. Mencken
Nice! It's 3.29 to 3.59 for regular here in Orange County,CA.
I love the Liberals here whining about this. It was the lead story on the local News last night.
They hate Big Oil and Vote for any Politician that is an Envirowack, but when they get hit in the Wallet, look out.
When Gas Prices dropped, they were the first to give Lord Obama credit. Now, it’s those Evil Oil Companies fault that prices are going up.
When they whine, just tell them they can avoid all this by living in a Cave or buying their own Oil Company and Refinery.
Wouldn’t it be great to live in a world where reality didn’t exist? LOL
Didn’t Brown impose a fifteen cent gas tax in 1/1/2015 ?.
Something like that.
I would like to see gasoline at 77 cents a gallon, but in California we pay 77 cents per gallon, just in taxes.
http://dailycaller.com/2015/01/07/ca-imposes-a-global-warming-tax-for-fuel-on-top-of-gas-taxes/
They hate Big Oil and Vote for any Politician that is an Envirowack, but when they get hit in the Wallet, look out.
When Gas Prices dropped, they were the first to give Lord Obama credit. Now, it’s those Evil Oil Companies fault that prices are going up.
The thing to point out to the “liberal” is the excruciatingly obvious point that gasoline costs less at a gas station than anywhere else.Anywhere away from a gas station, you have to go to a gas station to get fuel to carry to where you need it. It is only the oil company which keeps the price of liquid fuel below $200.00 a gallon or something.
I live in LA and see the gouging by Brown every day taxes is all he knows.
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