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United States gasoline reaches its all-time high after almost eight years while crude prices increased by 60 percent.
Gasoline, which is scheduled to be delivered in December, increased as much as 15 percent, the highest since June. The said month marked the closure of Colonial Pipeline Co., which is responsible for oil products transfer from Houston-based U.S. refining center to New York Harbor. The pipe mainlines were closed for the second time in a couple of months.
There is a jump of as much as $18.10 a barrel for the fuel’s premium to Brent crude. This is an increase by 24 percent from $14.05 a barrel. For many refiners, this increase is a theoretical profit edge.
From 3:39 A.M. Eastern Time, U.S. motorist organization AAA claimed that the regular-grade gasoline price in Georgia, Alabama, Virginia, and South Carolina is $2.206 per gallon, which is below the average in United States.
On the New York Mercantile Exchange, intraday trading led to wholesale gasoline price hike to $1.6351 a gallon, which is an increase of 21.56 cents. At 11:25 A.M. in London, the trade closed at $1.577. Since December 31, 2008, the intraday gain of 15 percent is the largest, cited by Bloomberg data.
The gasoline and crude oil surges followed Alabama explosion and fire, which resulted to shutdown of America’s largest fuel pipeline. The disaster back in 2008 injured more people and reported one death.
The explosion caused traders to hastily book European cargoes. Bloomberg data reported that the freight costs increased up to $17 per metric ton from its $12.40 initial price during that time.
In September, a spill incident caused the 12-day shutdown of Colonial pipeline, which slashed out supplies for 50 million Americans in the Southeast area. This caused shortages in Tennessee, Nashville, North Carolina, and Raleigh. Fuel deliveries’ international trade flows were changed, leading to waived rules on gasoline.
Watch this video.