This even affects us, all the up here in Wyoming, where gas in Riverton has danced near $3 a gallon for weeks. It cost me over $30 to fill up the Town Car with just HALF A TANK….

…which is why I’m now, and have been, riding my mountain bike all over campus, rain and shine.

You gotta do what ya gotta do…

Rich

Source

This Week In Petroleum
Released on September 28, 2005
(Next Release on October 5, 2005)

A Significant Blow, But Not a Knockout
With Hurricane Rita making landfall near the Beaumont/Port Arthur, TX and Lake Charles, LA refining centers, 7 refineries, amounting to 1.7 million barrels per day of refinery capacity (10 percent of U.S. refinery capacity), were directly in the path or very near the path of the hurricane. Damage to some of these refineries, and the lack of electrical power supply to others, is preventing their immediate return to service. Combined with the 5 percent of refinery capacity near the New Orleans area that was still out following Hurricane Katrina, as much as 15 percent of U.S. refinery capacity could be out for at least another couple of weeks.

As the chart above indicates, while refinery shutdowns are much less than they were just prior to Hurricane Rita’s landfall, when all Gulf Coast refineries from Sweeney, TX to Lake Charles, LA were shut down for precautionary reasons and to allow employees to evacuate, they still are significantly greater than at the peak following Hurricane Katrina. As a result, EIA estimates that these refinery outages amount to about 1.3 million barrels per day of lost gasoline production, over 700,000 barrels per day of lost distillate fuel production, and nearly 400,000 barrels per day of lost jet fuel production. While some of the lost production from inoperable refineries can be made up from increased production from unaffected refineries and increased product imports, the rest of it will likely be made up from additional draws from inventories and lower demand due to higher prices.

While Hurricane Rita undoubtedly delivered a significant blow to the U.S. refining industry, it did not deliver the knockout punch that some had feared. Rita made landfall north and east of the Houston/Texas city/Galveston refining center, home to more than 2 million barrels per day (or over 12 percent) of U.S. refinery capacity. If all of these refineries were also affected for an extended period, then over a quarter of the country’s refinery system would be offline, which would have likely sent petroleum product prices to new all-time highs. As it is, prices are expected to increase over the next few weeks, particularly gasoline prices. For now, the critical factor is how much of the refining capacity that is still shut down can return to service over the next few weeks. With the data for the week ending September 23 showing gasoline, distillate fuel, and crude oil inventories all at or above the average range for this time of year, it appears that inventories, along with increased product imports, may be sufficient to make up for lost production due to refinery outages for a brief period. However, the longer these refineries remain shut down, the more serious the situation becomes, particularly with the heart of the winter season just a few months away.

For the latest information on how oil infrastructure is being impacted in the aftermath of Hurricane Katrina, see EIA’s Daily Report and more detailed reports from the Office of Electricity Delinery & Energy Reliability.

U.S. Average Retail Gasoline Price Up Almost 2 Cents
The U.S. average retail price for regular gasoline increased by 1.7 cents to 280.3 cents per gallon after falling the previous two weeks. This week’s price is still 88.6 cents higher than this time last year. Prices were mixed throughout the country, with the Gulf Coast seeing the largest price increase of 6.8 cents to 272.4 cents per gallon. Midwest prices gained 4.2 cents but remained the lowest in the nation at 271.8 cents per gallon. The West Coast averaged 292.7 cents per gallon after dropping 1.9 cents; California prices fell 0.7 cent to 294.7 cents per gallon.

Retail diesel fuel prices rose 6.6 cents to reach 279.8 cents per gallon. Prices were up throughout most of the country, although the West Coast did see a price decline of 0.7 cent to 297.8 cents per gallon, the highest regional price in the country. California prices averaged 303.1 cents per gallon after dropping 2.9 cents. The largest price increase occurred in the Midwest, where prices increased 9.1 cents to 273.9 cents per gallon.

Propane Inventories Higher Despite Storm
Propane inventories managed a 1.2-million-barrel build last week despite the disruptive effects Hurricane Rita inflicted on Gulf Coast facilities. As of September 23, 2005, U.S. inventories of propane stood at an estimated 67.4 million barrels, a level that remains near the upper reaches of the average range for this time of year. East Coast inventories posted the only decline last week with inventories falling by 0.3 million barrels, while at the same time Midwest and Gulf Coast inventories showed remarkable resilience with respective gains of 0.9 million barrels and 0.6 million barrels. The combined Rocky Mountain/West Coast regions remained unchanged last week at 1.7 million barrels. Propylene non-fuel-use inventories pushed higher to 4.5 million barrels, a level accounting for a slightly higher 6.7 percent of total propane/propylene inventories, compared with the prior week’s 6.5 percent share.

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