Sunday, February 5, 2023

"Gas Stations Will Go Empty And Fuel Prices Will Shoot Up In The Coming Weeks As Supplies Run Dry"

Full screen recommended.
"Gas Stations Will Go Empty And Fuel Prices Will
 Shoot Up In The Coming Weeks As Supplies Run Dry"
By Epic Economist

"A new Bloomberg report exposes that energy supply shortages are emerging all around the nation, with gasoline and diesel stockpiles still at the lowest levels in a decade. In less than a month, the national average price of a gallon of gasoline rose by over 40 cents, and GasBuddy experts anticipate this increase in fuel prices will double over the next 30 days, sparking even more financial stress for Americans, as well as supply chain disruptions, and price volatility in most segments of the industry.

On Monday, Bloomberg published an exposé explaining that the European Union’s ban against fuel imports made from Russian crude oil takes effect over the next couple of weeks, and the United States will likely see a major impact on its fuel stockpiles, and conditions can get extremely dire for East Coast markets. Such market imbalances could trigger a ripple effect across the nation, experts say. Particularly because gasoline stockpiles already are at the lowest in about a decade, with inventories in most regions still below the five-year average for this time of year. To prevent the East Cost and the rest of the country from running out of fuel, suppliers will need to get creative, they added.

“Production remains the big problem, and traders appear to be betting on continued tight supply because of this fact,” Irina Slav says. “There is simply not enough refining capacity in the U.S. to ramp up production fast enough to respond to demand levels,” she continued. At the same time, the national average has climbed by more than 9% since the end of last year – the biggest jump to start a year since 2009, according to Bespoke Investment Group. With all that said, industry analysts alert that the average price could hit $4 over the next 30 days.

Meanwhile, refinery capacity is still being compromised by several disrupting factors. CNN reports that the extreme weather in much of the United States near the end of last year resulted in a series of outages at the refineries that produce the gasoline, jet fuel, and diesel that keep the economy humming.

For example, Colorado’s sole refinery, the Suncor refinery outside of Denver, was forced to halt operations due to freezing temperatures. When the refinery tried to restart, it suffered a fire, and equipment got damaged. Suncor has indicated that the refinery could be offline for weeks. No wonder why gas prices in Colorado have surged by nearly $1 a gallon over the past 30 days.Refineries elsewhere have been sidelined by extreme weather as well. At the moment, U.S. refineries are operating at just 84% of capacity, down from the mid-90% range at the start of December, Bespoke data shows.

Overall, price volatility and shortages may have far-reaching and devastating effects on many sectors of the economy and the daily lives of Americans. The lack of enough fuels could rapidly bring the nation to a standstill because the very fabric of society is built upon the ability to move and transport goods. The cascading effects of the shortages would be felt by every one of us, from the loss of jobs and homes to the shortages of essential goods and services. The economy could be pushed to the brink, as businesses struggle to keep their doors open, and the nation itself could be plunged into darkness if the energy sector fails. This is a very dire scenario that we are facing – one that must be averted at all costs." (And just how do we do that? - CP)

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