Retail gasoline in the U.S. rose to a seasonal high 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 a 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, according to EIA data.
“Crude 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:US)’s 240,000 barrel-a-day Richmond refinery, the largest in Northern California, were producing at 60 percent of capacity after an Aug. 6 blaze that shut the plant’s only crude unit, a person familiar with operations there said Aug. 8.
Other refineries that have produced below capacity include BP Plc (BP/)’s Whiting, Indiana, plant, Sunoco Inc. (SUN:US)’s Philadelphia plant, Valero Energy Corp. (VLO:US)’s Norco refinery in St. Charles, Louisiana, and Sinclair Oil Corp.’s Wyoming plant.
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.
Gasoline at the pump averaged $3.717 a gallon yesterday, a second straight daily record, Michael Green, a spokesman for AAA in Washington, said today.
“There is some good news for drivers despite record-high gas prices,” Green 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 rose $1.51 to $97.48 a barrel today on the New York Mercantile Exchange today. Prices rose as high as $97.60, the highest level since May 10.
Nymex gasoline futures for September delivery gained 5.02 cents to $3.081 a gallon. Prices increased 0.33 cent 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 1 million barrels, or 0.5 percent, to 202.7 million last week, a Bloomberg survey of nine 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 survey.
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.
AAA, the largest U.S. motoring organization, projected today that the most Americans since 2008 will travel on vacation during the Labor Day weekend this year. The number of people taking trips of 50 miles or more will increase to 33 million from 32.1 million last year. This year, survey covered the period from Aug. 30 to Sept. 3.
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.
To contact the reporters on this story: Lynn Doan in San Francisco at firstname.lastname@example.org; Barbara Powell in Dallas at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org