Stacks emerge from the Shell Deer Park refinery in Deer Park, Texas. (Dave Einsel/Getty Images via Bloomberg News)
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Diesel prices in the Midwest rose for a second day after the unexpected shutdown of two refineries in the region, fueling fears of a supply crunch.
BP's White powder The facility, the largest U.S. inland refinery, fell on the afternoon of Feb. 1, sending fuel prices higher. On February 2, power was restored, but it was unclear how long it would take to fully restart operations, adding to the instability. Exacerbating the potential squeeze on supply, Phillips 66's Ponca City, Okla., refinery had several units offline on the evening of February 1, according to Wood Mackenzie's Genscape.
Diesel prices in the Chicago area as well as the Group 3 physical markets were seen strengthening, although volume remained light, traders and brokers said. Group 3 diesel prices rose about 14 cents a gallon over the past two days, traders said.
The moves come as fuel inventories and supplies across the country have dwindled after a winter freeze curbed production. American consumers are already paying more for gas and diesel at the pump, according to data from AAA. Prolonged refinery shutdowns would hurt consumers and endanger President Joe Biden, whose re-election bid depends in part on curbing inflation.
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