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Motorists See Increase at Gasoline Stations

Posted on: Thursday, 16 March 2006, 12:00 CST

By Paul Monies, The Daily Oklahoman

Mar. 16--Virgin Islands refinery blamed for latest jump

Gasoline prices have jumped 15 cents at many pumps in the past several days despite falling prices for crude oil.

Refinery problems in the U.S. Virgin Islands and a switch to summer gasoline blends have contributed to the price hike, but experts said most of the increase can be tied to speculators in the futures market.

"It's an unusual situation because the price of crude is holding its own," said Chuck Mai, AAA Oklahoma spokesman. "But the price of gasoline on the futures market has risen dramatically. The least bit of bad news sends the market into a panic."

Drivers in Oklahoma City paid an average of $2.26 per gallon early Wednesday, according to AAA. That's 29 cents higher than this time last year. Tulsans also paid an average of $2.26 a gallon, up 28 cents from last year.

At a 7-Eleven store at Pennsylvania Avenue and NW 122 in Oklahoma City, gasoline prices jumped to $2.37 on Wednesday, up 15 cents from Monday night.

Prices in the area continued to climb Wednesday afternoon. Drivers paid from $2.17 to $2.49 a gallon across Oklahoma City, according to Web site www.oklahomacitygasprices .com. The site uses volunteer spotters to report prices at gasoline stations.

Problems at a refinery in the U.S. Virgin Islands have taken 150,000 barrels a day of capacity out of the supply chain, said Bruce Bell, chairman of the Mid-Continent Oil and Gas Association of Oklahoma. The refinery said repairs could take two weeks before it gets back to full capacity of 500,000 barrels of gasoline a day.

Bell said rising crude oil prices in the past few weeks are working their way through the refineries to wholesalers and gasoline stations, leading to higher fuel prices.

"Some of it has to do with not the refiners, but the marketers attempting to predict what it is they're going to have to pay for their gas the next time they have to buy it wholesale," Bell said.

Gasoline for April delivery fell 3.69 cents Wednesday to $1.83 per gallon on the New York Mercantile Exchange. Prices had jumped 12 cents Tuesday after news of the refinery problems in the U.S. Virgin Islands.

"The bulls are running wild in New York City on the Nymex as far as gasoline futures are concerned," Mai said of Tuesday's increases.

Crude oil, which makes up more than 50 percent of the cost of gasoline at the pumps, fell 93 cents to $62.17 a barrel on the Nymex.

Barring any major pipeline issues or global catastrophes, Mai predicted gasoline prices would stabilize and begin falling by early April. They would then rise again as the summer driving season takes hold in mid-May.

"It's an unusual situation because the price of crude is holding its own. But the price of gasoline on the futures market has risen dramatically."Chuck Mai, AAA Oklahoma spokesman

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Copyright (c) 2006, The Daily Oklahoman

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Source: The Daily Oklahoman

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