Gasoline Prices Spike On Refinery Shutdowns

U.S. gasoline prices rose on Tuesday as refineries across the country closed due to freezing temperatures. Gasoline prices have risen 12.4 cents from this time last week, according to the AAA data available on Tuesday.

The average price for a gallon of gasoline in the United States is now $3.228, AAA shows—6 cents per gallon lower than this time last year.

Gasoline prices began to rise during the cold snap that shut down refineries such as Suncor’s refinery in Colorado—that state’s only refinery. On Christmas Eve, Suncor said it was shutting the facility due to “extreme and record-setting weather.” The refinery also suffered a fire that caused damage to the facility. What’s more, the damage caused by the fire could see the refinery shut until sometime near the end of March.

Suncor is responsible for supplying Colorado with more than a third of all gasoline and a third of all jet fuel for the Denver International Airport.

Refinery shutdowns in the United States were widespread beginning on Christmas eve, with Rick Joswick, head of global oil analytics at S&P Global Commodity Insights, estimating that 3 million barrels per day of refining capacity were affected. By December 28, many refineries had started the restart procedures, but the restart process can take weeks.

The restarts for Pemex’s Deer Park refinery and Motiva’s Port Arthur refinery were said to possibly stretch into the first or second week in January.

“For the first time in two months, the nation’s average price of gasoline rose sharply last week,” Gas Buddy’s Patrick De Haan said in a note on Tuesday.

The most common U.S. gas price encountered by motorists on Tuesday stood at $2.99 per gallon, Gas Buddy said—unchanged from last week.

Gas prices are rising despite a 13.7% drop in gas demand last week, Gas Buddy data showed.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• The 10 Most Influential Figures In The History Of Oil
• The Oil Market Crisis Sparked By Russia’s Invasion Is Nearing Its End
• Russian Crude Oil Exports Plummeted At The End Of 2022