Isle gas prices likely to rise despite safety of supply
The shutdown of an Alaska oil field should have no impact on gasoline supplies in Hawaii
While the shutdown of an Alaska oil field should have no impact on gasoline supplies in Hawaii, prices are likely to increase as the global oil market tightens up and drives up costs everywhere.
Analysts predicted increases of 5 to 10 cents a gallon nationwide, with the higher increases expected in West Coast markets that rely heavily on crude oil from BP's Prudhoe Bay field.
A look at gas prices since July 14, when crude oil traded at a record high of $78.40 a barrel on the New York Mercantile Exchange. Prices listed are averages for regular, self-serve unleaded from July 17 through yesterday:
Source: AAA Fuel Gauge Report
Hawaii's two refineries, operated by Chevron Corp. and Tesoro Hawaii Corp., do not receive any oil from the field, company officials said.
"Tesoro in Hawaii is not being affected by the BP pipeline shutdown," said Nathan Hokama, a spokesman for Tesoro in Hawaii.
With respect to supply, "We don't foresee any immediate impacts," Chevron spokesman Albert Chee added.
Regarding prices, "crude is a global commodity, so we would expect to see normal market forces respond to the tightening of the crude market," Chee said.
BP Exploration Alaska Inc. announced Sunday it was shutting down the oil field in Prudhoe Bay, in Alaska's North Slope, baecause of severe corrosion on a pipeline. The move cuts off about 400,000 barrels, or 8 percent, of daily U.S. oil production.
The news pushed crude oil prices above $77 yesterday before they settled at $76.98 a barrel, a nickel below the record set July 14 following the escalation of violence in the Middle East.
The national average for gasoline also approached record levels, coming in at $3.036 a gallon for regular unleaded, just below the all-time high of $3.057, reached Sept. 5 after Hurricane Katrina hit the Gulf Coast, according to AAA's Fuel Gauge Report.
"I suspect that record will fall in the next 48 hours," said Tom Kloza, an analyst at Oil Price Information Service in Wall, N.J. He noted that pump prices around the country are likely to rise 5 to 10 cents a gallon.
How quickly Hawaii prices rise remains to be seen, but island prices have been slower to track recent trends nationwide.
Since July 14, when crude oil closed at $77.03 a barrel, Hawaii prices have remained fairly steady, averaging $3.370 a gallon, and fluctuating about a penny each day.
During that same time, prices across the country have averaged $3.001, steadily increasing from $2.956 on July 14 to $3.036 yesterday.
Although Hawaii's statewide average has consistently ranked among the highest in the country, several California cities have had higher average prices than Honolulu.
Frank Young of the Hawaii consumer group Citizens Against Gasoline Price Gouging said the recent jump in crude oil could translate into an increase of roughly 5 cents a gallon.
"You're going to have a tightening of the market," he said. "You've got to assume that everyone's going to be affected.
"The effects will probably be worse to the West Coast, but every market's going to be affected to some extent."
Crude oil prices are 20 percent higher than a year ago but still below all-time inflation-adjusted highs of around $90.
Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, estimated that if the Alaska shutdown lasts for months, crude futures could rise above $80 a barrel.
The Associated Press contributed to this report.