[Eli]

It seems to be getting more likely by the day that the US will see significant gasoline shortages.

I would like to hear peoples predictions on how bad these shortages will be.

What do think is going to happen?


and I have noticed something, the financial media people like Bloomberg and CNBC seem to be avoiding this story right now.

[Lore]

There may be a few spotty shortages, but unless we have a geopolitical or weather event, I believe in the US at least we will get by this summer without a drastic scarcity of supply.

[Eli]

Lore I certainly hope you are right.

I am really not so sure though.

It seems to me the that there are a lot of factors working against us right now.

The numbers are really not good, we should have been adding gasoline stocks for the past four weeks at least but that has not happened. Imports are not coming up as fast and we have a serious strike threat coming from Antwerp.

As far as I can tell there is no gas for the coming US peak driving season. When peak driving season does kick in that is when serious shortages will kick in.

Shortages of gas and gas lines are going to send a massive shock through the US economic system.

People who want to drive and see bags on the gas pumps will freak!

People in the business world are seriously worried about this, they know how bad this will be for the economy.

Heaven help us if we get a hurricane rolling up in the gulf towards Houston again. We should probably leave the possibility of hurricanes out because that will create a live doomer porn show.

[dukey]

$this->bbcode_second_pass_quote('', 'D')r. Peter Venkman: This city is headed for a disaster of biblical proportions.
Mayor: What do you mean, "biblical"?
Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath-of-God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies. Rivers and seas boiling.
Dr. Egon Spengler: Forty years of darkness. Earthquakes, volcanoes...
Winston Zeddemore: The dead rising from the grave.
Dr. Peter Venkman: Human sacrifice, dogs and cats living together - mass hysteria.

[AirlinePilot]

I dont think its going to be "biblical" but I do think its going to have some seriuos economic implications. Once any shortages become manifest the group mentality takes over. Price could get very ugly in many places. This is what could drive gas prices towards 5$ a gallon easily.

Then you have to worry about hoarding as once the news of real shortages takes hold, thats the next step, a run on gasoline with all the associated warnings by TPTB. Once you see that it has the potential to get ugly. I hope thats as far as it goes but i think we will still be able to get gas. It may not be convenient, and it may be very expensive, but we will still be able to get it for neccesary travel and some liesure depending on your income level.

For these reasons I have found it prudent to store 20-25 gallons of gas starting now. I purchased the containers last week, and the gas a few days back. It sits in a cool corner of my garage at the moment. Hopefully this shortage issue will ony be shortlived and we wont see significant problems for a few years yet, but you never know. Reality is frequently stranger than fiction.

[Eli]

Yeah it will only get biblical if we see the hand of God at work.
Say, a cat 5 hurricane bears down on the Texas cost and takes out some major refineries, then it will get Biblical.

I don't even want to speculate what would happen if something like that transpired.

If serious shortages do materials in areas across the nation, I agree with Pilot that we will soon get hording problems that will magnify the whole mess.

4 dollars a gallon or more and shortages even if only spotty has the potential to burst the US economic bubble. 4 dollars a gallon will push inflation higher to the point the fed will have to raise rates.

The effect will be a tightening money supply and people hurting for cash and business and individuals struggling to keep the system up.

[Lore]

$this->bbcode_second_pass_quote('Eli', '
')4 dollars a gallon or more and shortages even if only spotty has the potential to burst the US economic bubble. 4 dollars a gallon will push inflation higher to the point the fed will have to raise rates.

The effect will be a tightening money supply and people hurting for cash and business and individuals struggling to keep the system up.

[strider3700]

$this->bbcode_second_pass_quote('Lore', '
')
I would say more likely $5/gal gas would start to put the bite on consumers. People right now are not fazed by $3 which was a big deal a year ago. They're driving more then they ever have. It looks like Joe driver is already mentally prepared for $4, although I expect to see some demand destruction along with that new plateau.

[Eli]

Yeah I here you and I agree right now people are not really bating an eye at three bucks.

4 bucks though is going to make people howl again though, if it is sustained through out the summer it will have some serious knock on effects to inflation.

[seldom_seen]

$this->bbcode_second_pass_quote('', 'D')ES MOINES, Iowa -- A shortage in the supply of unleaded gasoline has caused certain terminals in Iowa to run out of gas Tuesday, according to Bruce Heine of Magellan Midstream Partners.

Heine said the scenario is "simply one where supply is not meeting demand.''

http://www.kcci.com/news/13235071/detail.html

[PrairieMule]

$this->bbcode_second_pass_quote('strider3700', '
')
About 15 years ago my mother routinely maxd her credit card out. The company saw that she had a good job and made payments so they just kept upping the limit. I'd assume you'll have to go for months of not making any payments before the company will shut you down.

Besides even if people are looking at the bills compair an extra $20-$50 per fill up with a mortgage payment on $300,000 It's a drop in the bucket and easy to ignore.

People will drive until they physically can not get the gas to do so.

[Baldwin]

So, does this mean I should clean off the rifle?

[Eli]

Thanks Seldom for the link.


We already are having shortages in supply in Colorado and now Iowa.

We are screwed.

We are going to have serious problems before Memorial Day is my guess.

[Lore]

$this->bbcode_second_pass_quote('Baldwin', 'S')o, does this mean I should clean off the rifle?

[Newsseeker]

$this->bbcode_second_pass_quote('Lore', 'T')here may be a few spotty shortages, but unless we have a geopolitical or weather event, I believe in the US at least we will get by this summer without a drastic scarcity of supply.

[tsakach]

The current gasoline supply situation has a bears some resemblance with Enron-style energy market manipulation.

$this->bbcode_second_pass_quote('', 'A') series of refinery accidents and outages, including shutdowns in Texas, Indiana and Oklahoma, have contributed to the recent decline in gas supplies. The Energy Department released data last week showing an unexpected drop of 2.8 million barrels in nationwide gasoline stockpiles, as refinery utilization declined to roughly 88 percent of capacity.

Making matters worse was the idling of one of the nation's largest refineries, a 420,000-barrels-per-day BP plant in Indiana, cutting supplies throughout the Midwest.

"We're in big trouble," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. He noted that inventories stand at 194.2 million barrels -- or slightly above the levels reported in the days after Hurricane Katrina struck the Gulf Coast in 2005 -- and he predicted that that the average prices this summer will surpass the 2005 record of $3.06 a gallon.

To meet peak demand and have a comfortable cushion to offset disruptions, Flynn said gasoline inventories will need to rise to 210 million barrels by Memorial Day.

"There's a fear built into the market that there won't be enough gasoline for the summer driving season," said Eric Wittenauer, an energy futures analyst at A.G. Edwards & Sons in St. Louis.

[DantesPeak]

Looking at refinery problems one at a time like I have, they mostly appear unexpected. Some have even been caused by lightning, raccoons, and even rats. Granted the quality and hours of the personnel is slipping – but why didn't they stop the rats or why didn't they perform the maintenance sooner?

Apparently they didn't think the costs justified the possible benefits. Also government forced refineries to work extra hard after Katrina. Maybe refineries planned wrong, but if your refinery goes down, you lose money. So they do have a strong incentive to keep producing.

Anyway, we might barely avoid a major gasoline crisis this year, but not a significant one. But what happens next year and the year after? Gasoline shortages start, barring some unusual event like depression, war, etc..

[Plantagenet]

The Oil Companies aren't building new refineries in the U.S. anymore. They are building them in Asia where wages are lower and environmental regulations aren't so tight, and then shipping the refined gas to the US.