Aftermath of the October Price Spike and the Latest Bubble Map
November 27, 2012
The price of gasoline in California has stabilized, a gallon of regular in Los Angeles today was $3.79, down $0.91 from the height of the spike on October 8th. And now the congressional investigations are heating up. At the California Senate hearing on the price spike held earlier this month, energy consultant Robert McCullough presented a report in which he points out three main problems with the California refining market; “a limited number of refineries, no ready access to gasoline supplies outside the West Coast, and very little market data.” Though the CEC and the refining industry maintain McCullough is misinterpreting the data, his report contends that some refiners may have exaggerated the impacts of their shutdowns to create market pressures that drove up gasoline prices. Inspired by this report, six West Coast U.S. Senators, including Barbara Boxer and Dianne Feinstein, called on the Justice Department today to investigate “possible market manipulation and false reporting by oil refineries which may have created a perception of a supply shortage” in October.
On to the Bubble Map: Crude oil differentials have remained relatively unchanged since our last blog post on November 15th. WTI was up $2 on November 27th to $87. There continue to be deep discounts inside the bubble due to pipeline constraints and East Coast refinery and railway disruptions in the wake of Hurricane Sandy.
Categories: Wisdom from the Downstream Wizard