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Refinery Issues Mounting in Midwest US & California

A new report by the American Automobile Association suggests that refinery failures could result in higher gas prices in much of the United States, despite the cyclical pressures that tend to keep prices down in the winter. According to Automotive Fleet Magazine:

“A glitch at a Chevron refinery in El Segundo, Calif., caused a temporary shutdown, the effect of which could be magnified due to other refineries in California shutting down due to either unplanned repairs or seasonal maintenance, according to AAA. In addition, an electrical fire at ConocoPhilipps’ Wood River refinery in Roxana, Ill., shut down production.”

While current gas prices still remain lower than they were near the end of December 2012, these supply shocks illustrate the potential of short term fluctuations to overpower cyclical market forces. It is times like these in which hedging fuel could provide the type of protection so sorely needed by fleet managers and individuals alike.

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