The vulnerability of the network, combined with low
inventories of both gasoline and the crude oil from which
it’s made, have the government and energy experts
increasingly nervous that some places in the USA will run
out of gas.
An accident that has disrupted shipping on the Mississippi
River and in the Gulf of Mexico could trigger shortages in
the coming weeks.
“It looks like the big bulk terminals in Florida are going
to run out in the next few days,” said Tom Kloza, analyst
at the Oil Price Information Service.
Big gasoline suppliers were warning their customers of
imminent Florida shortages and reduced allocations, he
said. The Coast Guard said it had reopened some of the
channel, but a backlog of ships remained.
“The U.S. gasoline supply system is not ‘just-in-time'
delivery; it’s ‘a-minute-too-late’ delivery,” Kloza said.
The river disruption “underscores how hand-to-mouth the
supply system is. It’s a preview of the kinds of things
that can happen in spades” as demand rises in the spring
and summer driving season.
Americans drive more as the weather warms, increasing
demand to 9.5 million to 10 million barrels of gas a day in
the summer, vs. 8.7 million in the winter months.
“Many signs (point) to a tight gasoline market this driving
season,” the U.S. Energy Information Administration said.
Analysts were more blunt. “Expect major regional gasoline
shortages,” warned A.F. Alhajji, associate professor and
energy economist at Ohio Northern University.
When that happens, prices zoom as gasoline wholesalers
compete for supplies, giving a regional shortage national
impact. Alhajji was confident that “gasoline prices will
increase nationwide as we approach the driving season, even
in areas that have adequate supplies.”
Average gasoline prices in California and Hawaii have
topped $2 for a gallon of unleaded regular, and Nevada is
close at $1.968, AAA said.
AAA said regular averaged $1.681 nationwide, up 7.9 cents
from January. That's 5.6 cents less than the record average
of $1.737 reported last Aug. 30. EIA, using different data,
lists the record as $1.747 last Aug. 25.
Gas would have to average $2.89 to surpass the inflation-
adjusted record of $1.417 in 1981.
EIA’s weekly report showed gasoline supplies down 1% last
week from the previous week. Refining operations were
slowed by problems, maintenance and disruptive changes
necessary to produce lower-sulfur and summer-blend gas
required by clean-air regulations.
Supply worries have kicked up West Texas Intermediate crude
oil $1.10 per barrel, to $35.68.