Gasoline just keeps getting costlier

Aug. 31, 2005 at 4:26 PM
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NEW YORK, Aug. 31 (UPI) -- The wholesale price of regular gasoline for September delivery jumped 7.1 percent Wednesday to $2.65 per gallon on the New York Mercantile Exchange.

That increase, after an intra-day high of $2.92 per gallon, was greater than the day's increases in any other publicly traded petroleum commodity and reflected the fact the biggest contributor to rising energy costs is a shortage of refining capacity, not a lack of crude oil.

Hurricane Katrina made that shortage worse by forcing the closure of eight refineries, representing 12 percent of U.S. capacity.

Meanwhile, crude oil for October delivery fell 1.3 percent to $68.94 per 42-gallon barrel, the result of Washington's decision early Wednesday to release some crude from the Strategic Petroleum Reserve.

Also easing crude prices was the resumption of some Gulf of Mexico production, still 91.45 percent shutdown. Kerr-McGee, for example, restarted some 55,000 barrels of oil per day from its Gulf operations.

Resumptions of Gulf natural gas production were slightly ahead of oil output at 83.46 percent. That cut the commodity's price 1.6 percent to $11.47 per million Btu.

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