Oil Up After Russian Invasion Of Ukraine; Florida Gas Prices Rise

February 28, 2022

Florida gas prices increased four cents last week and more pump price hikes could be on the way. Crude oil prices surged in overnight trading, amid growing concerns that the Russia invasion of Ukraine could impact global crude supplies.

Floridians are paying an average price of $3.52 per gallon. That’s the most expensive daily average since July 2014. Florida gas prices have risen an average of 33 cents per gallon since the beginning of 2022, and $1.33 per gallon since the beginning of 2021.

North Escambia prices bottomed out $3.35 Sunday night at two stations on Century. A low of $3.33 could be found in Pensacola at two warehouse clubs.

Russia is the third-largest oil producing country in the world and the crude oil market was already tight before this conflict began. Last week, oil prices spiked when Russia invaded Ukraine. However, prices quickly retreated to previous levels after President Biden announced sanctions that didn’t specifically target Russian oil.

Unfortunately, oil prices quickly shot up Sunday night, when international trading began. At the time of this writing, the U.S. price of oil was trading above $96 per barrel – an increase of nearly $5/b (5%) from Friday’s closing price of $91.59. The energy market has had plenty of news to digest over the weekend, the most noteworthy may be the removal of Russian banks from SWIFT – making it more difficult for other countries to purchase Russian oil and gas.

“Unless oil prices reverse course, the pain at the pump is about to get even worse for Floridians,” said Mark Jenkins, spokesman, AAA – The Auto Club Group. “There has been a lot of speculation about oil prices, and the high seems like a moving target. If oil lands at $95 a barrel for a sustained period of time, drivers could expect to see a 15 cent jump at the pump. If U.S. oil reaches $100 a barrel, the total increase would be more like 25-30 cents per gallon.”

Oil prices have increased around $20 per barrel in 2022. At $96 per barrel, the US price for oil is up nearly $50 (100%) since the beginning of 2021.

The Russian invasion isn’t the only issue keeping upward pressure on pump prices. The busy spring and summer driving seasons are drawing near, which typically lead to strong fuel demand. Summer gasoline is moving into the market, which is more expensive to produce. Refineries are conducting seasonal maintenance, which can reduce normal gasoline production levels. And in addition to all those seasonal trends, there was an explosion at a Louisiana refinery last week.

NorthEscambia.com photo, click to enlarge.

Comments

14 Responses to “Oil Up After Russian Invasion Of Ukraine; Florida Gas Prices Rise”

  1. David Huie Green on March 4th, 2022 1:13 pm

    REGARDING:
    “Keystone was only 8% complete. The oil that would have been transported through it would require greater and more expensive processing than other kinds.”

    Interesting claim. Also interesting to note that much Canadian oil comes into the USA from the Alberta tar sands. From the following:

    Production averaged 3.53 million barrels per day between January and June (2021 dhg) — 5.7 per cent higher than during the same period in 2020 and 1.8 per cent above the same period in 2019, said a release from ATB Economics on Wednesday.

    The vast majority of that production — 86 per cent — is accounted for by oilsands extraction.

    The U.S. imported its bulk from Canada—more than 1.3 billion barrels, or 61% of America’s 2.2 billion imports.

    https://www.cbc.ca/news/canada/calgary/alberta-oil-oilsands-production-1.6137423

    There are other pipelines, not as good for what is close to road tar, but it still reaches us. The idea of burning it to get it thin enough to push through a pipeline does not appeal. Obviously what is needed is a nuclear power plant to heat it instead. That would also make for interesting refining practices.

    David for a glowing future

  2. David Huie Green on March 3rd, 2022 9:41 pm

    REGARDING:
    “It would have been exported, not used here, actually cause prices here to rise.”

    The United States would convert a low quality resource into a high quality set of products and sell them to those wanting those products.

    Good. You now understand the purpose of refineries. That’s what they do.

    Not all would be exported but some usually is. People in other countries would buy American products with American money.

    Awful, just awful.

    Say what??

  3. Lee on March 2nd, 2022 4:05 pm

    @David Huey Green. Keystone was only 8% complete. The oil that would have been transported through it would require greater and more expensive processing than other kinds. It would have been exported, not used here, actually cause prices here to rise.
    @Mic Hall. The U.S. has never been energy independent.

  4. David Huie Green on March 2nd, 2022 11:55 am

    REGARDING:
    “@MtDewey, neither of those affect current prices. In fact, we wouldn’t see oil from either for years.”

    Actually, the pipeline (Keystone?) would have provided petroleum very quickly. It was pretty much complete other than a short disputed stretch. Having a reliable source from Canada would make it less affected by wars elsewhere. Very heavy crude, but with cracking and refining, it would have helped.

    Opposition to production from hydraulically fractured shales didn’t stop that production, but lower prices from other sources made it less profitable to go after. Higher prices should spur the production. Nobody uses sources for raw product which cost more than others can provide finished product for. They would go broke.

    The idea that you should sell what you have for less than you will have to pay to replace it is also bad business, a path to failure.

    David for better batteries and enhanced nuclear power production

  5. Lee on March 1st, 2022 8:42 pm

    @MtDewey, neither of those affect current prices. In fact, we wouldn’t see oil from either for years. From a variety of sources, including oil industry publications, the consensus is that it is supply and demand. Production slowed during the pandemic and now they are playing catch up.

  6. MtnDewey on February 28th, 2022 10:57 pm

    @Lee. Ummmm, drilling leases denied, pipeline shutdown. There are two.

  7. MtnDewey on February 28th, 2022 10:55 pm

    Man, wouldn’t that be cool if we had a pipeline? Oh yeah we did.

  8. Lee on February 28th, 2022 8:15 pm

    Jeff Howard and Jim, could you please explain why you blame Biden for increased gas prices?

  9. Jeff Howard on February 28th, 2022 11:42 am

    Thanks, Joe.

  10. Waiting on February 28th, 2022 10:26 am

    Where’s the gas tax DeSantis promised to lower/remove for Florida?

  11. SueB on February 28th, 2022 9:26 am

    Fed’s need to get involved. We have already paid for gas that is being pumped at gas stations. This is price gouging.The gas stations are making an extra monies on what they have already paid for. So what is happening in the world should not affect what is already out there. The CONSUMERS are being duked.

  12. ekg on February 28th, 2022 8:06 am

    I just don’t understand why the prices go up when the gas is messed with in foreign countries……We have oil here in lots of places….my departed father worked for Phillips66 years ago and he was the one who told me about the places we had lots of oil in the U.S……

  13. Mic Hall on February 28th, 2022 7:25 am

    Just two years ago we were energy independent.

    Reducing our imports and increasing our exports.

    The fuel was produced with all our environmental restrictions.

    On the first day the current President put an end to that and shifted our oil sources to countries that have NO environmental restrictions at all and fund their governments. Fuels being shipped to us by huge ships. Yep that’s “green”.

  14. Jim on February 28th, 2022 2:52 am

    Thanks Joe!! You’re more to blame than anyone.

Written by William Reynolds · Filed Under News