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OIL AND GAS
Summer cheap for U.S. drivers, AAA finds
by Daniel J. Graeber
Washington (UPI) Jun 1, 2016


disclaimer: image is for illustration purposes only

Summer for U.S. commuters starts off with some of the lowest prices at the pump in a decade, though Midwest drivers are missing out, a retail survey finds.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.32, up a fraction of a percent from one week ago and still the lowest price for this time of year in more than 10 years. Lower gas prices during the long Memorial Day weekend encouraged a record number of motorists to travel for the holiday, putting a squeeze on demand.

"This year's summer driving season is expected to be characterized by higher-than-normal gasoline demand, and demand remains on pace to test record levels reached in 2007," AAA said in a weekly retail market analysis. "Refineries nationwide are working in preparation for what is likely to be [a] record-breaking season and if they are able to keep pace, pump prices should remain relatively lower."

Taken as a whole, retail gasoline prices are holding relatively stable, though regional markets vary considerably. For the West Coast, a troubled Exxon Mobil refinery in California is operating at normal levels, keeping the balance between gasoline supply and demand in check. Gasoline prices for the West Cast, as a result, have barely moved over the past month.

Midwest drivers, however, are seeing some of the highest prices, as well as highest price increases, in the country because of a steady string of refinery issues. Ahead of the long holiday weekend, Michigan's governor declared an energy emergency because of regional pipeline issues and an outage at a Marathon refinery in Detroit. Gas prices in Michigan and Illinois are among the top 10 highest in the nation.

Markets in the East and Gulf Coasts, meanwhile, are seeing lower prices as heavy supplies spell relief for consumers. Mississippi has the lowest state average prices at $2.09 per gallon for Tuesday, a price that's 25 percent lower than California, which has the highest state average in the Lower 48.

Crude oil prices, which are up 7 percent from one month ago, have a heavy influence on consumer gasoline prices. AAA said oil supply outages in major producers in Canada and Nigeria have trickled down to the retail market for gasoline.

Looking ahead, retail prices could be swayed dramatically by the upcoming Atlantic Hurricane Season, which runs through the end of November. While a normal hurricane season is expected, any severe storm could close down refineries in the Gulf of Mexico and lead to dramatic spikes at the pump.


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