Thursday, April 17, 2014

U.S. pump prices seen extending gains

See U.S. pump prices seen extending gains by Barbara Powell and Mario Parker of Bloomberg. It appeared in the print version of the San Antonio Express-News on April 2. So why are gas prices going up? Exerpts:
"... because of declining supplies and rising costs for the ethanol added to the fuel"

"Gas, averaging $3.56 a gallon at the pump nationwide, already costs the most since September, according to AAA. Prices for ethanol, the fuel additive mandated by the government, are the highest in more than seven years after freezing weather and a shortage of rail cars slowed distribution and reduced inventories."

"“We expect that the peak for gasoline prices will be in April, with the most likely outcome about $3.65,” said Michael Green, a spokesman for AAA in Washington. “

Ethanol climbed a record 81 percent in the quarter, surpassing a 65 percent gain during the third quarter of 2005..."

" distillers take plants offline for routine spring maintenance..."

"Ethanol's premium to May gasoline reached 64.7 cents Tuesday. The additive has averaged a 17.39-cent discount to gas since 2005."

"Congestion on the nation's rail lines delayed shipments from the Midwest, where 89 percent of ethanol plants are located, to terminals in the Northeast where it's blended with gas..."

"Replenishing that supply is going to be difficult as companies wrestle with when to perform seasonal maintenance and a lack of availability of rail cars, said Julie Ward, an assistant vice president at R.J. O'Brien & Associates, a brokerage in Des Moines, Iowa."

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