Gas prices rise due to shortages

[Thomas Linton]

So here's a question for the group. Have you seen gas stations without gasoline? Have you seen actual evidence of shortages?

In the "energy crisis" of the 1970's, I repeatedly saw stations with closed pumps ("out of gas") -- or totally closed due to lack of product to sell.

 

[Dave Rishar]

I've seen stations run out of #2 here. It only seems to happen around this time of year. I could understand it happening in the winter but this makes no sense at all.

But that doesn't matter. The current "shortage" always seems to be just acute enough to jack prices higher, but not quite enough to run out. It's at least partially artificial by OPEC's admission.

 

[Yvsa]

Tom I haven't seen any stations without fuel to sell but they're having to truck fuel from a bit further away down here since the flooding we've had shut down a refinery in Kansas. And with the flooding an oil tank at the same refinery lost several thousands of gallons of oil that has been flowing towards our water supply. There hasn't been a whole lot of concern about it being picked up by the water intakes because of the much deeper water but there has been an issue of getting it cleaned up, and come to think about it I haven't heard anything more about it lately but then I don't watch the news that much.

 

[Apothecary]

I've seen Calgary, Alberta gas stations without gas in the past year due to too many refineries up the road in Edmonton shut down for maintenance. Then there was the Hurricane Katrina situation in the New Orleans, Louisiana area which resulted in stations running out of gas.

I'd also say that we're past the era of cheap, easily extracted gas by a few years so would expect it to go even higher in price as well as scarcer if another Katrina hits.

My gut feeling is there is a good probability of more stations shutting down in the near future than previously, due to supply not keeping up with increased demand, increased vulnerability of supply and other factors. Horseback riding, anyone?

 

[Fiddleback]

You make a good point Thomas. Supply and demand is a hard bull to ride sometimes. I think a lot of the price fluctuations are based on rumors and feints. Its easy to panic out speculators, and I think today a good portion of investors are overextended. In more ways than one.