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    Kansas Flooding Threatens Gas Price Hike

    With a refinery closed, wholesale prices rise and analysts warn of higher retail prices.

    COFFEYVILLE, Kan. -- Floods in southeastern Kansas could mean higher gas prices for drivers in most Midwestern states, analysts told The Wichita Eagle. But they disagree over how high prices at the pump could reach.

    Floodwaters closed the Coffeyville Resources refinery here earlier this week, and officials at the refinery told the paper they don't know how long it will be closed.

    Prices for diesel and gasoline could be the highest in the nation, close to $3 per gallon, one analyst told the paper. Yesterday, the average price for unleaded gasoline in Wichita stood at $2.89 per gallon, according to AAA.

    "It is really bad timing, it is bad luck. For all intents and purposes, it looks like that refinery is not going to be contributing any gasoline or diesel fuel for the rest of the summer," Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, told the paper.

    Traditionally, Kansas wholesale prices trade at a nickel above the Gulf Coast during the summer, but on Tuesday they were trading 25 to 30 cents above those prices, Kloza said.

    However, the spike could be attributed to the Fourth of July demand for gas, said Darin Newsom, an analyst with the Omaha-based Internet trading firm DTN.

    "We really have not seen a lot of reaction or an undue concern for supply and demand," Newsom told the Eagle. "In days when the prices can move $2 or more, this isn't as dramatic as it possibly could have been."

    The closed refinery adds to a number of events at Midwestern refineries over three months. A lighting strike closed a Wynnewood, Okla., refinery for more than a week, while severe storms damaged the loading rack and two above-ground storage tanks at a terminal near Great Bend.

    "All eyes have been focused on hurricanes," Mike Thornbrugh, manager of public and government affairs for QuikTrip, told the paper. "But right now, we are dealing with torrential rains shutting down refineries, lightning strikes and tornadoes. Mother Nature is playing havoc on us."

    While no gas shortages are expected, local gas stations that rely on the Coffeyville refinery may have to buy from other sources until it reopens, he said. The refinery is one of the gasoline suppliers for QuikTrip and other outlets in the Wichita area.

    On Tuesday, floodwaters were two to six feet deep in some areas of the plant.

    "We are waiting for floodwaters to recede enough for us to get into the facilities -- there is water throughout," Steve Eames, spokesman for the company, told the paper.

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