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Retail gasoline in the U.S. rose to a record for this time of year after refinery upsets cut fuel supplies and crude traded near a three-month high.
The national average price for regular gasoline gained 2.3 cents to $3.744 a gallon this week, and was up from $3.581 a year ago, the Energy Information Administration said in report yesterday. That’s the highest level for this season since at least 1990, when the agency began collecting prices.
U.S. retail gasoline has climbed for seven weeks, advancing 38.8 cents a gallon since July 2, as crude prices gained more than $12 a barrel and refinery disruptions sent gasoline inventories to the lowest level for this time of year since 2008. Prices at the pump averaged $3.72 a gallon yesterday, the highest ever for that day, and will probably break daily records for at least several more weeks, the AAA motoring organization said yesterday.
“Crudes prices are most of it, and gasoline stocks are still really low,” David Hackett, the president of Stillwater Associates in Irvine, California, an independent fuel consultant, said by telephone yesterday. “I don’t expect any relief in gasoline prices until after Labor Day” on Sept. 3, he said.
Advances in wholesale prices for gasoline, corn and wheat have led a rally in the Standard & Poor’s GSCI index of 24 raw materials from a closing low on June 21, surpassing the 20 percent threshold that signals a bull market.
Process units at Chevron Corp. (CVX)’s 240,000 barrel-a-day Richmond refinery, the largest in Northern California, were producing at 60 percent of capacity following an Aug. 6 blaze that shut the plant’s only crude unit, a person familiar with operations there said Aug. 8. The incident was a “close call” for workers engulfed in a vapor cloud, Rafael Moure-Eraso, the chairman of the U.S. Chemical Safety Board, said yesterday.
BP Plc (BP/) idled a coker at the 420,000 barrel-a-day Whiting refinery in Indiana from July 23 to Aug. 9 after a fire.
Sunoco Inc. (SUN)’s Philadelphia plant shut a fluid catalytic cracker from July 23 to Aug. 2 for repairs. Valero Energy Corp. (VLO) started a fluid catalytic cracker at its Norco refinery in St. Charles, Louisiana, over the weekend that had been out of service since Aug. 10 for unplanned maintenance. And Sinclair Oil Corp. is running its Wyoming refinery at 60 percent capacity following an Aug. 16 power failure that caused a plant-wide shutdown.
U.S. Gulf Coast and West Coast gasoline prices gained the most this week, increasing to $3.546 and $4.002 a gallon, respectively. The Midwest was the only region where prices dropped, falling 2.7 cents to $3.761 a gallon.
Citgo Petroleum Corp. reported an equipment startup at the Lemont refinery in Illinois Aug. 7. The 170,500 barrel-a-day plant shut a fluid catalytic cracker last month and was scheduled to finish work on the unit by early August.
“There is some good news for drivers despite record-high gas prices,” Michael Green, a spokesman for AAA in Washington, said in an e-mail yesterday. “The national average price of gas has remained flat in recent days as refinery issues have stabilized in the Midwest and West Coast.”
Prices in the U.S. East Coast should also drop in a few weeks as refiners switch out of summer-grade gasoline production, according to Hackett.
“Refiners can’t make as much gasoline to the summer grade as they can to fall and winter,” he said. “That’ll increase supplies in the East and help take the pressure of prices.”
West Texas Intermediate oil for September delivery was at $96.58 a barrel, up 61 cents, on the New York Mercantile Exchange today. Prices rose as high as $96.76, the highest level since May 11.
Nymex gasoline futures for September delivery were at $3.0472 a gallon, up 1.64 cents. Prices increased 0.33 cents yesterday on speculation that demand will increase as the U.S. approaches the Labor Day holiday.
Motor-gasoline inventories declined for a third week in the seven days ended Aug. 10, dropping 2.37 million barrels, or 1.2 percent, to 203.7 million, the Energy Department said Aug. 15. Stockpiles of the fuel probably fell another 1 million barrels, or 0.5 percent, to 202.7 million last week, a Bloomberg survey of seven analysts showed.
Crude supplies also slipped for the third week, shrinking 3.7 million barrels, or 1 percent, to 366.2 million, the agency said. They probably climbed for the first time in four weeks in the seven days ended Aug. 17, gaining 900,000 barrels, as imports increased and demand slid from a nine-month high, according to the median estimate of nine analysts in a Bloomberg News survey.
Average U.S. gasoline demand for the four weeks ended Aug. 10 fell 2.8 percent from a year earlier to 8.91 million barrels a day, the Energy Department data showed.
The Energy Department conducts a telephone survey of about 800 retail gasoline outlets across the U.S. each Monday to post weekly gasoline prices as of 8 a.m. local time that day.
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