The EIA’s latest This Week in Petroleum report says the average gas price at the pump has risen 45 cents per gallon since the start of the year, reaching $3.75 per gallon on Feb. 18.
About two-thirds of the rise in gas prices reflects higher gasoline crack margins, according to the report. Some of the factors behind this are: planned and unplanned refinery maintenance; the low starting level for gasoline crack spreads going into 2013; preparation for seasonal fuel specification changes; and developments in global product demand that have affected domestic refinery utilization rates, maintenance needs and product balances.
Many refineries schedule maintenance early in the year when gasoline demand is seasonally low, EIA says. Estimates indicate that off-line refinery capacity increased from the beginning of 2013 to more than 1.7 million barrels per day (bbl/d) for the week ending Feb. 15. As a result, gross inputs into US refineries fell 9 percent from 15.9 million bbl/d per day in mid-December to 14.4 million bbl/d for the week ending Feb. 15.
Hess Corporation’s announcement in late January that it planned to close its 70,000-bbl/d Port Reading refinery at the end of February may have worsened the situation, the report says.
Despite the increases in wholesale and retail gasoline prices, EIA says there are indications that gasoline crack spreads are beginning to ease. Both reformulated gasoline blendstock for oxygenate blending (RBOB) futures and Brent spot prices have declined in recent days, with a larger decrease in the former (see chart). Additionally, some 11 million barrels of waterborne gasoline are en route to the United States and Canada.
Although pressure on gasoline crack spreads appears to be easing, EIA says the short-term outlook for gas prices remains volatile, and says the increase in wholesale prices had not yet been fully reflected in prices at the pump.