Oil prices are hovering above $112 this week. Oil prices are currently up 15 cents at $112.36 a barrel on the New York Mercantile Exchange, as of Wednesday April 27, 2011. Oil prices increased after a U.S. Energy Department report showed that the gas stockpiles are at the lowest level since August 2009.
Gas inventories have dropped about 14% in the past nine weeks. With the peak summer driving season coming over the next 90 days, concerns about reduced gas supplies are increasing. Gasoline prices typically fall in the winter and rise in the spring as refiners switch to more expensive summer blends of gasoline and the demand for travel increases. Federal and local laws require different additives in summer to preserve air quality, but more expensive additives tend to drive up the price.
Violence and uncertainty in the Middle East and Africa is continuing to restrict the world’s oil supply, further driving oil and gas prices higher. With gasoline supplies falling and retail prices increasing, refiners can pay more for oil, and drivers can expect to pay more at the pump.
Gas prices in the US are averaging $3.87, only 24 cents less than the 2008 record of $4.11, set in July, 2008. Gas prices are currently at the highest level since Aug. 3, 2008, according to AAA. Gas prices have increased for 36 consecutive days.
This week three refineries in Texas City, TX, have been temporarily shut down to due to a fire and power outage. These three refineries account for about 4% of U.S. refining capacity. BP reported that all units currently remain shut and it doesn’t have reliable power supply for its Texas City refinery, one of the largest in the nation. Marathon Oil and Valero said they have restarted their facilities.
Analysts are waiting to hear what the Fed has to say about interest rates and the economy. Traders want to know when or if the Federal Reserve is going to begin shifting away from its policy of keeping interest rates at extremely low levels in an attempt to stimulate the economy. Critics say Fed policy has kept the dollar weak and helped sharpen the surge in oil and other commodities.
For companies who are being effected by the recent surges in gas prices, investing in a fleet tracking system may be a wise investment. A GPS-based fleet tracking system can help your company save time, money and immediately reduce fuel costs.
And it’s only April!