Diesel Prices Climb After Two Midwest Refineries Go Offline
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Diesel prices in the Midwest climbed for a second day after two refineries in the region shut down unexpectedly, stoking fears of a supply crunch.
BP’s Whiting facility, the largest U.S. inland refinery, went down the afternoon of Feb. 1, sending fuel prices surging. On Feb. 2, power was restored, but it was unclear how long a full restart of operations would take, adding to volatility. Compounding the potential supply squeeze, Phillips 66’s Ponca City, Okla., refinery had multiple units go offline the evening of Feb. 1, according to Wood Mackenzie’s Genscape.
Diesel prices in the Chicago area as well as the Group 3 physical markets were seen strengthening, though volume remained thin, traders and brokers said. Group 3 diesel prices have firmed by about 14 cents a gallon over the past two days, traders said.
The moves come as inventories and supplies of fuel across the country have fallen after a winter freeze curtailed production. American consumers are already paying more for gasoline and diesel at the pump, according to data from AAA. Prolonged refinery outages would be a blow to consumers and pose a risk to President Joe Biden, whose reelection bid hinges in part on stifling inflation.
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