It couldn't have come at a worse time. Refinery outages in the United States are colliding with the beginning of driving season, and analysts are warning that drivers could see a spike in prices at the pump.
The national average price for a gallon of gasoline in the United States is currently sitting at $3.412-up from $3.396 yesterday an up a hearty $0.156 per gallon (4.8%) from $3.256 per gallon just a month ago. Still, prices are down year over year, with the average price for a gallon of gasoline selling for $3.466 this time last year, according to AAA data.
The jump in gasoline prices has trickled into consumer pricing as a whole-a risky development for the ruling party that faces re-election in November.
According to the latest editing of the Weekly Petroleum Status Report ending March 8, total motor gasoline inventories in the United States fell 5.7 million barrels from the week prior, and are now sitting 3% below the five-year average for this time of year.
And prices are set to climb even higher, according to some analysts. "There is every reason to believe gasoline prices will screech even higher going forward," Tom Kloza, head of energy analysis at Oil Price Information Service, said according to Reuters. The reason for the higher trend is higher summer travel demand which is about to kick off, declining gasoline inventories, and refinery outages.
U.S. refineries operated at 86.8% of their operable capacity according to the latest WPSR report, with gasoline production averaging 9.9 million barrels per day, with IIR Energy expecting 1.2 million bpd of U.S. refining capacity to remain offline this week. Next week, IIR Energy expects that figure to dip to .885 million bpd.
Add to that Ukrainian drone strikes on Russian refineries, and prices could increase.
By Julianne Geiger for Oilprice.com
Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More