ALEXANDRIA - Oil prices briefly topped $100 per barrel for the first time since September 2008 and wholesale fuels prices spiked as chaos continues in Libya.
Reuters reports that as much as 400,000 barrels per day - or about 25 percent of Libya??s production - has already been shut off.
Libya produces an estimated 1.7 billion barrels per day of oil - about 2 percent of the world??s total. But commodities traders are more concerned with "what if" scenarios in which the unrest spreads to other oil-producing countries in the area.
As a result, oil prices are $15 per barrel higher than they were a week ago. With 42 gallons in a barrel of oil, that equates to a 35 cent per gallon increase in the cost of oil, and that cost is already being seen at terminals.
Oil Express, an energy industry trade journal published by OPIS, called Wednesday??s activity "some of the most stunning increases for crude and refined products numbers since the chaos and volatility of 2008."
Oil Express reported that spot prices are even greater that futures prices on the markets. It noted that March RBOB (Reformulated Blendstock for Oxygenate Blending) climbed more than 11.5 cents per gallon, and April RBOB jumped more than 12 cents per gallon.
NACS is aggressively working with the media and general public to explain current market dynamics as retailers face huge wholesale price increases.
"We are emphasizing three factors that are contributing to higher prices. First, obviously, is the situation in Libya. But we also saw prices increase the past few months as world demand for oil pushed prices higher. And finally, we are in the midst of the switchover to summer-blend fuel that further complicates the system," said NACS Vice President of Communications Jeff Lenard.
Lenard encouraged retailers to use NACS information to communicate to the media or their customers about current market dynamics.
"The online NACS Annual Fuels Report provides timely background information on our industry. Also, NACS Daily provides daily gasoline, diesel fuel and oil prices - plus weekly margin numbers. They can help you communicate what are the factors behind recent increase," said Lenard.
Also, retailers are encouraged to share stories about what is happening in their marketplace with Lenard at jlenard@nacsonline.com. NACS will respect confidences, if requested.