Gas prices set to go even higher

‘Worst of all worlds’ as crude soars and refineries shut down

Bloomberg News

DALLAS — Retail gasoline prices are gaining at the fastest pace since February, and may keep climbing as crude prices surge and refinery units shut for repairs.

Pump prices have risen four days in a row, advancing 3.2 cents a gallon over Thursday, AAA, the nation’s largest motoring group, said Friday on its website.

“We’re looking at the worst of all worlds with overly expensive crude oil, tightening supplies and increasing demand,” said Michael Green, a spokesman in Washington for Heathrow, Fla.-based AAA. “There’s not a lot of hope for motorists.”

In metropolitan Memphis, unleaded regular averaged $3.34 per gallon on Friday, up 2 cents in a day and 8 cents in a week, AAA’s website reported.

West Texas Intermediate crude, the U. S. benchmark, has rallied 9.7 percent this month. Gasoline futures are up 13 percent in July and rose the most in seven months Friday as at least three refineries have shut fluid catalytic crackers for unplanned work.

“The price rise has been wickedly rapid,” John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, said by telephone. “Consumers could see a 10- to 15-cent rise by midto late next week. This rise in crude prices is going to sting everyone.”

WTI touched a 15-month high of $107.45 this week as U. S. stockpiles tumbled, and unrest in Egypt raised concern that the flow of Middle East shipments will be interrupted. At the same time, Federal Reserve chairman Ben Bernanke backed sustained monetary stimulus to boost the economy. Crude and gasoline futures also jumped after a spate of refinery shutdowns in Texas, Oklahoma and Illinois.

Crude oil supplies fell 20.2 million barrels to 373.9 million in the two weeks ended July 5, according to the Energy Information Administration, the Energy Department’s sta- tistical unit. It was the biggest two-week drop since at least 1982. Inventories at Cushing, Okla., the delivery point for WTI, dropped 2.69 million barrels last week to 47 million, as BP started a revamped crude unit at its Indiana refinery and Enbridge Inc. reopened a pipeline serving Phillips 66’s Wood River refinery in Illinois.

Gasoline supplies fell 2.63 million barrels last week to 221 million, the least since May 31 and the biggest drop since April 19. Demand increased for a fourth straight week to 9.3 million barrels a day, the highest since Aug. 10.

Gasol i ne f ut ures reached $3.1175 a gallon Friday on the New York Mercantile Exchange, the highest settlement since March 18, after the shutdown of two fluid catalytic crackers at Port Arthur, Texas, refineries and reports that Irving Oil Corp. shut a catalytic cracker at its St. John, New Brunswick, refinery and Philadelphia Energy Solutions idled an alkylation unit at its refinery, the largest on the East Coast.”