Oil prices are falling today. But reason that they are falling is going to hurt your pocket book big time. This from a Bloomberg story….
Crude oil fell from a 10-month high in New York as a refinery shutdown in Kansas cut demand.
Coffeyville Resources LLC shut its refinery in Coffeyville, Kansas, yesterday because of flooding on the Verdigris River, according to as statement on its Web site. The 108,000-barrel-a- day refinery can produce about 2.1 million daily gallons of gasoline.
Crude demand should decline because of the shutdown, said Andy Lebow, a trader at Man Financial Inc. in New York. “That’s the motivating force in the market today,” Lebow said.
What do you think the price of gas is going to do now that 2.1 million gallons of production has been taken off of the market?
I am keeping my eye on R-Squared to see what Robert Rapier will have to say about the issue.
Edit: Mr. Rapier did respond in the comments section over at his blog. Apparently the refinery that was shut down is relatively small (who would have thunk that 2.1 million gallons of production per day was small?) and BP may be bringing some other refineries back on-line after having problems with them. So he does not seem to think that it is going to change the already tight gas situation much either way. He grants thought, that losses of any refinery capacity is small tragedy given that we want to get out of the supply hole we are in.