WTI crude oil is trading down about 1.6% this morning at around $85.70 primarily due to the lack of demand for crude from two large refineries that were shut down due to Hurricane Sandy. Gasoline prices are lower as well as demand has dropped.
Until electrical power is restored to the Phillips 66 (NYSE: PSX) and Hess Corp. (NYSE: HES) refineries in New Jersey, the refineries will remain out of production.
And the long lines we've seen for gasoline are also due to the lack of electricity. Gasoline stations need electricity to run their pumps. No electricity, no gasoline.
The other factor holding down crude and gasoline prices is the inability of people to get to work. As long as people aren't driving to and from work, demand is stunted and prices will remain low.
The situation is only temporary, of course. The crude and the gasoline are available, they're just in the wrong places.
Filed under: 24/7 Wall St. Wire, Commodities, Oil & Gas Tagged: featured, HES, PSX