Gasoline is rising five times faster than crude oil as refinery shutdowns limit supplies.
Retail gasoline increased 0.3 cent to $2.458 a gallon Thursday, the highest level since Dec. 17, according to Heathrow, Florida-based AAA. After climbing 20 percent since Jan. 31, prices will rise by another 20 cents this month because of refinery maintenance and unexpected outages, the nation’s largest motoring group estimates.
Refineries are operating at the lowest rate in six weeks, government data show. Fuel production may slow further as more plants shut for seasonal maintenance. Gasoline is also climbing as the panic in oil markets subsides, with volatility the lowest in three months. The gain threatens to reduce the windfall to U.S. drivers from last year’s plunge.
“The refinery problems led to increases in futures and wholesale prices,” Andy Lipow, president of Lipow Oil Associates LLC, an energy consulting firm in Houston, said by phone Thursday. “Gasoline doesn’t go up and down with crude oil. The problems are more on the gasoline front.”
Pump prices outpaced a 4 percent gain in U.S. benchmark crude since the end of January. West Coast gasoline jumped after an explosion at an Exxon Mobil Corp. refinery near Los Angeles, and East Coast supplies fell the most since October after upsets at plants near Philadelphia.
“Gasoline prices are still expected to rise,” Michael Green, an AAA spokesman, said by phone Thursday. “But we are not going to have a dramatic increase that could send prices above $3 a gallon.”
American households are expected to save $750 each on lower gasoline costs in 2015 compared to 2014, the EIA said last month.
Source: Bloomberg | Moming Zhou and Dan Murtaugh