Metro Denver gasoline prices remained stable Tuesday despite the severing of a major artery supplying gasoline to the southeastern U.S., which in turn triggered a frenzied response from commodity traders.
A track-hoe crew working on a section of the , near Birmingham, Ala., ignited a fire and explosion Monday that killed one worker and sent five others to the hospital.
The accident forced the closure of two pipelines, one supplying gasoline, and one supplying diesel and jet fuel to Alabama, North Carolina, South Carolina, Tennessee, Virginia and the Washington, D.C. area.
Traders responded Tuesday morning by driving wholesale gasoline prices for December delivery up 21.56 cents, or 15 percent ,to $1.63 a gallon on the New York Mercantile Exchange, according to Bloomberg. That intraday increase was the largest since Dec. 31, 2008.
Traders also moved to secure supplies out of European refineries, given that they didn’t know when the 2.5 million barrels a day of gasoline coming through the Colonial pipeline, which connects with 29 refineries, would be restored.
The Rocky Mountain region didn’t and shouldn’t see much change in prices at the pump one way or the other, analysts said.
“All in, it would appear very little change to the local wholesale cost on gasoline in the Denver market,” said Bryant Gimlin, vice president of operations with Hill Petroleum in Arvada.
Likewise, retail prices were stable. A gallon of regular unleaded gasoline was at metro Denver stations, according to GasBuddy. That is close to where they were on Monday, and prices were still down from the $2.13 a gallon averaged last week.
“There is very minimal impact west of the Mississippi,” said Patrick DeHaan, a senior petroleum analyst with GasBuddy in Chicago.
During a prolonged closure, Gulf Coast refineries might reroute their production to more distant markets, pushing down prices there. But Gimlin and DeHaan said refineries would most likely store the gasoline to restock customers once the damaged pipeline restarted.
Colonial Pipeline restarted its jet fuel pipeline late Monday night and announced Tuesday plans to restart its gasoline pipeline by this weekend.
The in an area near the current break. Fuel shortages emerged in cities across the southeast as drivers responded by filling up their tanks ahead of big price hikes.
