Great Lakes gas prices jump after partial refinery shutdown

Leaking tubes on a piece of equipment forced BP to shut its largest crude unit at its refinery at Whiting, Indiana, according to Bloomberg. How temporary, that is somewhat in the air.

This spike might last a few weeks, but DeHaan tells us we can expect BP to fix the issue at its refinery as fast as possible.

“It’s such an important refinery smack in the middle of the Midwest”, said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

They’re forecasting prices to jump between 15 and 30 cents per gallon in the next week for motorists in the Midwest and Great Lakes regions.

Dehaan said the prices will eventually go back down and he thinks the prices could return to the $2 around Christmas. “There’s no way it should jump 50 cents in one day”, said another patron filling up her tank.

In certain cities, however, the increase has been much bigger. The Whiting plant is reportedly the seventh-largest refinery in the U.S., with an operational capacity of 413,000 barrels per day.

In the past six months, Green Bay’s gasoline prices have risen from a low of $2.19 in February to a high of $2.77, according to GasBuddy.com data.

Before the Whiting incident, gas prices were falling as crude production is continuously increasing.

Gas prices could reach the $3 mark by the weekend if the problem persists, DeHaan warns.

News on the length of the unit’s outage was fiercely sought after by refined products and crude traders because of the impact the loss of production at the refinery could have on prices.

“It may take time to spread to Green Bay”, DeHaan said in an email.

In other words, with the glitch at the refinery, demand for gasoline is likely to go up, and with supply down, prices increase.