Shut Down Refineries Don't Raise Crude Oil Prices

When trying to explain the factors that briefly pushed oil prices above $80 a barrel the

NYT

included the fact that hurricane Humberto led to the shutdown of several refineries for a few days. Well, this one doesn't work. Refineries are a source of demand for crude oil. If refineries are shut down for some reason, this would reduce the demand for crude oil and should lead to a fall in price, other things equal. Of course, if refineries are not operating, then it will reduce the supply of refined products like gasoline and home heating oil, which would put upward pressure on the price of these goods.

--Dean Baker

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