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So there's the potential catastrophe in the making -- California gas stations the shot down number refinery and a pipeline.
Is causing -- -- shorted some stations are actually closing their pumps.
And those that are -- the average price of a gallon of regular gas to be reached four dollars and 32 cents that is fifty cents higher than the national average.
Could this spread across the country to put on -- perspective I'm joined by oil experts.
Stork editor in the short report Steven -- so much for coming back on you are one of the smartest guys on this stuff.
-- sort this out -- what's going on California right now.
All most what's going on in California is the same situation that we're seeing elsewhere around the country that is we have very low supplies of gasoline.
And then a refinery complex has been plagued by a series of disruptions for the past month.
In short we have an inability to supply a market that is already short of supply.
Now we're reaping what we've -- over the last couple years.
Still it's did you get even worse I mean I'm reading articles about a cost -- out in Simi Valley.
Where they just they don't have any gas left to their having to sell super for the regular price because they're just out of super they're trying to make -- their oppressors but -- the little guys -- -- date they can't take a loss like that.
Is this gonna get worse and continue and spread -- It -- get worse for at least another week early united netted two weeks and potentially to the end of this month especially for the smaller guys the retailers and Southern California.
Keep in mind being a -- gasoline is a very tight margin business very difficult in a normal market to make money in this market it's absolutely impossible.
Now going back and of October.
We are retailers in California or Southern California still have to sell a summer grade gasoline right this is exacerbating the shortage -- -- you look forward what is really scary Melissa is the term structure.
-- actually seeing winter gasoline being priced in the futures market and this winter gasoline which is -- cheaper gasoline to manufacture.
It is now trading at a premium Chindex summer fact that it's clear indication that the market is indeed concerned about the availability of supply in the short term us.
The mark this is you're gonna have a long term affect the market has really concern and the reason why this is an important story to everybody across the country not just to people in California is because.
This was brought on ourselves this is a function of the summer bland.
-- the environmental standards in California.
Up all the special.
Things -- they put into this gas to four California.
Has made it so scarce has created these sort of bottleneck problems and it's an important lesson to the rest of the country right.
In needed as we have all of these boutique.
Fuels -- Californian what you have to do is keep the fuel segregated.
In the tanks in the pipes out the infrastructure is just so -- that when you continue slice and dice.
-- for all these little -- markets.
-- that's fine but you're going to have to pay for itself California is actually reaping what it so.
But that doesn't mean it can't happen elsewhere look I'm here in Philadelphia.
I'm watching the death of the -- beside our of East Coast refineries die right in front of my eyes so this is going to have when you continue to price -- refineries here in the United States.
That -- continue to hamper our ability to turn crude oil into what we need.
What was I gonna do it's gonna net supply and drive -- price of course.
Just once again I -- why -- these refineries getting squeezing going out of business because for the average American out there watching.
That seems insane because we see the price of crude oil is so high the price of gasoline is so high you assume that the refiners are making a bunch of money.
Walt for the most part on the East Coast refiners are gasoline is expensive but it's not expensive enough because the margins again simply are not -- When we're talking about global oil at a 115 dollars -- -- 120 dollars a barrel we're not getting the net back -- the refinery is.
Is not getting the net back on re -- so.
Not that are some refineries that are making a lot of money especially in this central part of the United States where oil is plentiful and it is therefore cheap.
But -- for the most part what we've learned over the past five years that US refineries which are the most sophisticated refineries in the world.
Are still having a difficult time making ends meet and they are acting that is they're closing their units in a court to -- margins.
It's a very complicated story but it's important to bring it to our viewers because you know we all depend on gasoline one way or the other whether it's because we buy food to grocery store and that's how it gets there -- because you drive a -- and people need to know what's going on Stephen thanks -- All of us who -- will be -- listen thank you time now.