Traders See Signs Of Squeeze Behind L.A. Gasoline Spike

[Purveyor]

Source: Reuters

By Erwin Seba

HOUSTON, Oct 5 (Reuters) - The unprecedented surge in California's wholesale gasoline market this week has many hallmarks of a classic short squeeze, traders said on Friday, evoking a once common ploy in unregulated oil markets.

With the isolated West Coast gasoline market already reduced by refinery outages and a pipeline closure that had diminished stockpiles to near their lowest in over two decades, the pump was already primed for a rise in prices, especially as refiners prepare to switch to winter fuel production.

But industry sources who operate in the close-knit, fiercely competitive market say fundamental factors alone cannot explain the 97-cent surge in the premium for prompt-delivery CARBOB gasoline this week. Even in the notoriously volatile California market the spike was unprecedented, pushing retail prices to near a record high of nearly $5 a gallon.

Multiple trade sources say West Coast refiner Tesoro was caught short, forcing it to scramble to buy additional fuel from other companies in order to meet its commitments.

Read more: http://www.reuters.com/article/2012/10/06/gasoline-squeeze-idUSL1E8L5HZA20121006?type=marketsNews

[RobertEarl]

1. To everybody in California: Take a day off

If every car driver there took one day off from driving sometime this week, the supply will increase by 15% mol. Two days and its up to 30%.

Problem solved.

[olddad56]

13. That is wonderful advice. I'd also like to see everyone take a month off of just one brand.

say maybe Chevron

[SoapBox]

2. Enron again

Crooks & Criminals at work.

[dmr]

6. I was thinking the same thing.

[IthinkThereforeIAM]

7. Kick

...me, too.

[msongs]

3. because of speculators/criminals/thieves who are allowed by congress nt

[Spitfire of ATJ]

4. This is what happens when everyone talks about the rich Liberals here....

....the guy who works at the car wash gets it in the neck.

[lexw]

5. something's "Koch"ing...one part of a series of an October surprise.

Romney was out here (in California) a week or so b4 the debates.
The Koch brothers are disgusting people, and they do not want to lose this election.
...but I think they will.

[allrevvedup]

8. Payback for this I suspect...

21:34:16: Obama: The oil industry gets $4 billion a year in corporate welfare. Basically, they get deductions that those small businesses that Governor Romney refers to, they don't get.

Now, does anybody think that ExxonMobil needs some extra money, when they're making money every time you go to the pump? Why wouldn't we want to eliminate that? Why wouldn't we eliminate tax breaks for corporate jets? My attitude is, if you got a corporate jet, you can probably afford to pay full freight, not get a special break for it.

http://www.policymic.com/articles/15792/presidential-debate-transcript-romney-wins-first-presidential-debate

Oil companies count on their benefits, too!

[uwep]

9. No new refineries built since 1976

and they will only close refineries. I believe there was a refinery closed just recently in Northern California. Shouldn't the oil companies have to bear the cost of old equipment and pipes breaking down. Take it out of their ungodly profits or quit the corporate welfare.

As cars get more efficient these thugs will close refineries citing lack of demand.

[PSPS]

11. Can't blame it on refineries or shortages. Gasoline is now the country's biggest export.

[KamaAina]

16. That's a Big Oil talking point

True, no new refineries have been built from scratch, but existing ones have been expanded many times over.

The Chevron refinery in Richmond (north of Oakland) closed temporarily due to a fire -- the first of several bizarre malfunctions at CA refineries. (Two power outages? Srsly?) Then there was the one that closed for maintenance -- right around the time of the autumn switchover...

[SILVER__FOX52]

10. The Koch...............

Suckers are at it, again.

[Unknown Beatle]

12. Dickhead Cheney's

Energy Task Force strikes again.

[villager]

14. Glad to see our elected Democratic officials right on that, too...!

Oh, wait...

[tdog8]

15. Refinery outages, pipeline closures, whatever.

Oil companies are said to be making record profits.

I think the CEOs felt the need for new vacation homes and we're paying for them. We should definitely take a day off driving if possible. Using bicycles for short trips would be good for the air quality too.

[KamaAina]

17. This would be a good time for people to try out L.A.'s new, expanded transit system

the new Gold Line goes out to Pasadena and East L.A., while Metrolink commuter rail serves nearly all of SoCal, even over the Grapevine.

[coalition_unwilling]

18. My wife and I went out last night to the Westside Pavillion mall in Westwood to

see a movie ("The Master," a new American tour de force). While driving there, we noticed that gas prices were approx. $4.75/gallon for lowest-octane. And that there seemed far fewer land yachts (like Escalades and Navigators) out on the streets.

Very strange. Mall was semi-deserted at 5:30 p.m.

FWIW, I drive a Nissan Sentra that gets 35 mpg, so only have to fill up once or twice a month. Last time I filled up it was at about $3.50/gallon! I'm guessing some of these land yachts now cost more than $100 per fill up.

[shanti]

19. wait, what?

metrolink goes over the grapevine? is that new?

[KamaAina]

20. I don't think it goes over the actual Grapevine

but it does go out to Lancaster and Palmdale.

http://www.metrolinktrains.com/schedules/line/name/Antelope%20Valley/service_id/1142.html

[shanti]

21. thanks for the info

i didn't know the details.

[Bandit]

22. And yet the USA is EXPORTING 50% MORE oil than four years ago...

Go Figure....

[librechik]

23. rampant collusion and price fixing--they already know they can do it in California

we'll all get it eventually. They arrange to take refineries "temporarily" offline. I used to work for a gas company, this is how they work it.