Billings Refinery Fire and Explosion Sends Diesel Prices Higher
An explosion and fire at the Exxon refinery in Billings several weeks ago is contributing to the rapid rise in gas and diesel prices throughout the Rocky Mountain region.
KGVO News spoke to Gas Buddy analyst Patrick DeHaan on Wednesday for an update on oil, gas and diesel prices.
“There have been several refinery issues in the Rocky Mountains including a fire and explosion. The Exxon Mobil refinery in Billings is also pushing up prices,” began DeHaan. “Montana's average price for a gallon of gasoline is now $4.47 a gallon, which is up close to 10 cents from a week ago. Prices in Missoula are now making a jump at some stations to $4.59 a gallon, whereas others are still a few cents cheaper.”
DeHaan said the news couldn’t be worse for the U.S. and the rest of the world regarding gas and diesel prices.
“We continue to be hit just about anywhere we can be hit,” he said. “Oil prices are up again this week as the European Union sanctions Russia's energy. These are sanctions that will be effective at the end of this year. The imbalance that will create has driven up oil prices to $118 a barrel. In addition, the drop in refining capacity from three years ago has choked off the ability for refineries to produce things like gasoline and diesel.”
DeHaan said the Billings refinery fire and explosion continues to negatively affect gas and diesel prices.
“Diesel remains extremely tight on terms of supply, especially considering that refinery explosion at the Exxon refinery in Billings, that's a sore spot that could get a little bit worse,” he said. “As a result of that explosion and fire, refinery utilization in the Rocky Mountains has tumbled down below 70% percent, and that’s certainly much, much lower than where you'd like to see it. There will be some room for improvement there, but overall, I don't expect a meaningful recovery in the amount of supply for potentially months.”
Regarding the summer tourism outlook for Montana, DeHaan said studies are indicating that Americans will be spending their vacations closer to home.
“Looks like Americans are still going to hit the road, but it looks like they may be staying closer to home as a result of the high price of gasoline,” he said. “That's the trend that we've been seeing. Americans are getting a little bit of cabin fever here wanting to hit the road, but the high price of fuel is eating into some of those plans. U.S. gasoline demand was only about 8.8 to 8.9 million barrels a day over Memorial Day, and that's far lower than where we've seen it in past years when prices were much lower.”
DeHaan said the lowest price for gas in Missoula continues to be at Costco, where there was a long line of vehicles gassing up for last weekend’s Memorial Day holiday.
DeHaan said he sees no end in sight for the rapid increase of gas and diesel prices.