As if it wasn’t bad enough that analysts are reporting that gas prices will hit an all-time high this summer with a potential of hitting an average of $3.90 per gallon, reports are now coming in that East Coast gas prices may spike due to refineries closing.
“There are going to be logistical problems getting product into New York,” said Ben Brockwell, an analyst at the Oil Price Information Service. “The people I talk to are expecting shortages from August through the rest of the year.”
Nearly 50 percent of the refineries on the East Coast have either shut down or may shut down in the coming months being unable to compete with the Gulf Coast facilities that can use cheaper oil. This could cause gas shortages out on the East Coast, raising prices even more than what we’re already seeing this year.
The older refineries are unable to process the cheaper, heavier types of oil that are coming in from Canada’s oil sands, Saudi Arabia, and Venezuela. Currently the majority of the East Coast refineries can only process the light, sweet crude oil from West Africa and the North Sea. Refineries along the Gulf Coast, however, have been updated to support the heavier, cheaper oil.
[Source: CNN Money]