California refinery problems cause Oregon fuel prices to climb 70 cents in a month

Oregon feels ramifications of issues at California refineries.

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The days of sub-$2/gallon gas feels like a dream at this point. Was it real, or a figment of our imagination?

In Oregon, gas is now hovering slightly below $3 — representing, on average, a 70-cent spike since last month.‘s transportation writer Joseph Rose wrote an examination of why prices have been escalating so quickly in the state:

Oregon gas prices typically experience a spike in late winter and spring as the refineries undergo annual maintenance. As the sites go off-line for repairs and cleaning, tight supplies on the West Coast usually push prices higher during the spring and early summer. However, a Feb. 15 explosion rocked a critical Exxon Mobil refinery in Torrance, Calif., worsened seasonal production declines and caused pump prices to take off like a bottle rocket. The refinery remains offline and isn’t producing a drop of gasoline until crews can repair the damage.

Meanwhile, a labor strike shut down a Tesoro oil refinery in Martinez, in Northern California, for several days in late February. The Torrance and Martinez facilities combined make up nearly 20 percent of the state’s crude oil processing capacity.

AAA Oregon/Idaho Public Affairs Director Marie Dodds was quoted in Rose’s story — as well as the Portland Tribune’s piece on the same subject — explaining how Oregon has been hit harder than most states due to issues in the supply chain.

“Oregon has the dubious distinction of having the second-largest weekly increase in gas prices in the nation this week,” says AAA Oregon/Idaho Public Affairs Director Marie Dodds. “Skyrocketing prices in West Coast markets due to refinery outages and operational issues are putting upward pressure on the national average for regular unleaded.”

But while the West Coast reels from refinery problems, the Associated Press reports that the United States has so much crude that having enough storage for the oil could be a problem.

For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country’s main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week. If this keeps up, storage tanks could approach their operational limits, known in the industry as “tank tops,” by mid-April and send the price of crude — and probably gasoline, too — plummeting.

“The fact of the matter is we are running out of storage capacity in the U.S.,” Ed Morse, head of commodities research at Citibank, said at a recent symposium at the Council on Foreign Relations in New York.


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