Gas prices in Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, Ohio, Oklahoma and Wisconsin have sharply increased, rising 27¢/gal. in the last week alone. Outages and extended maintenance at refineries in the region are behind the rise, having curbed output and restricted supply.
While the US market is flooded with new found crude oil deposits, and early May supplies were at their highest levels since the early 1930s, issues at only a handful of refineries have had significant impact. Furthermore, the effects of these issues may not be isolated within the region; Brian Milne, Schneider Electric, has suggested that there will inevitably be wider repercussions, and overall gas prices will also rise.
Greg McBride, a senior financial analyst for Bankrate.com, has outlined how the broader economic impact of this trend could be significant. According to him, in the last two years 60 % of Americans have said that they cut back on discretionary spending when gas prices rise. He holds that there is no reason to believe that the 2013 result will be any different.
The Labor Department has said that April’s drop in gas prices had helped to push consumer inflation down 0.4%, and the Commerce Department described lower gas prices as having spurred a gain in consumer spending. It is possible that rising gas prices will reverse both trends.
Adapted by Emma McAleavey.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/21052013/refinery_problems_pump_up_gas_prices_396/