Crude Futures Surge Amid Mississippi River Floods and Refinery Disruptions

Strategic Insights -

Crude futures have settled higher on Tuesday, driven by a surge in gasoline futures following reports that the Mississippi River floods are curtailing refinery operations and fuel shipments. The price of light, sweet crude for June delivery has risen by $1.33, or 1.3%, to $103.88 a barrel on the New York Mercantile Exchange. The floods are expected to cause significant disruptions to the oil and fuel supply chain, with refineries preparing for potential shutdowns and Motiva Enterprise LLC's 237,000-barrel-a-day Norco, La., refinery preparing for supply disruptions.

Key Takeaways:

  • The price of light, sweet crude for June delivery has risen by $1.33, or 1.3%, to $103.88 a barrel on the New York Mercantile Exchange.
  • The floods are expected to cause significant disruptions to the oil and fuel supply chain, with refineries preparing for potential shutdowns.
  • Gasoline futures have surged, with front-month June reformulated gasoline blendstock (RBOB) settling 10.13 cents, or 3.1%, higher at $3.3797 a gallon.
  • The premium of gasoline futures over crude has risen to more than $38, the highest level on record.
  • U.S. gasoline stockpiles have fallen for 11 straight weeks, and analysts expect further declines.
  • Crude inventories are expected to rise by 1.2 million barrels, while gasoline stocks are seen falling by 700,000 barrels.

Statistics:

  • The price of light, sweet crude for June delivery has risen by $1.33, or 1.3%, to $103.88 a barrel.
  • The premium of gasoline futures over crude has risen to more than $38, the highest level on record.
  • U.S. gasoline stockpiles have fallen for 11 straight weeks.
  • Gasoline futures have surged, with front-month June reformulated gasoline blendstock (RBOB) settling 10.13 cents, or 3.1%, higher at $3.3797 a gallon.

Sources:

  • Dow Jones Commodities News via Comtex, "Crude futures settle higher as gasoline surges" (May 10, 2011)
  • Royal Dutch Shell PLC, statement on Motiva Enterprise LLC's 237,000-barrel-a-day Norco, La., refinery (May 10, 2011)
  • Enterprise Products Partners, statement on barge traffic disruptions (May 10, 2011)
  • Lipow Oil Associates, statement on logistics and transportation issues (May 10, 2011)
  • American Petroleum Institute, expected to report data on crude and gasoline stockpiles (May 10, 2011)