U.S. Gasoline Costs Rising Going Into Labor Day

weekly average retail price of regular gasoline, United States

Knowledge supply: U.S. Power Data Administration, Gasoline and Diesel Gas Replace, and U.S. Bureau of Labor Statistics (BLS). Observe: Weekly knowledge replicate U.S. common common gasoline retail worth for all formulations. Actual worth is calculated utilizing Client Value Index from BLS.

On the Monday earlier than the Labor Day weekend, August 28, 2023, the retail worth of standard gasoline averaged $3.81 per gallon (gal) throughout america. Over the previous 5 weeks, oil manufacturing cuts by Saudi Arabia, low U.S. gasoline inventories, and introduced refinery upkeep within the Northeast have elevated the common gasoline retail worth by 6%, or 22 cents/gal.

In keeping with our Gasoline and Diesel Gas Replace, after adjusting for inflation (actual phrases), retail gasoline costs going into this Labor Day weekend had been 4%, or 14 cents/gal, decrease than final 12 months.

Latest manufacturing cuts by Saudi Arabia and different OPEC+ members are placing upward strain on crude oil costs (the largest element of the gasoline worth). Manufacturing cuts by OPEC+ members in April didn’t have an effect on crude oil costs a lot as a result of considerations about slowing financial progress drove expectations that crude oil demand would stay regular or decline. This time, successive rounds of minimize bulletins starting in June and up to date knowledge exhibiting bettering financial situations in america are elevating the value of crude oil.

Forward of this Labor Day, Hurricane Idalia is affecting U.S. Gulf Coast manufacturing and pipeline services. Hurricane-induced facility closures can have unsure results on the retail worth of gasoline, and the scale of the affect pertains to the length and severity of the closures.

Restricted gasoline provides have additionally contributed to greater gasoline costs. Refinery outages brought on by excessive climate and refinery upkeep initially scheduled for final 12 months have saved U.S. gasoline inventories under the earlier five-year common since March 2022. Most just lately, we anticipate deliberate upkeep for Irving Oil’s refinery (320,000 barrels per day [b/d]) in Saint John, New Brunswick, and Monroe Power’s refinery (185,000 b/d) in Coach, Pennsylvania, which is able to run from mid-September to mid-November, to maintain gasoline provides restricted, particularly within the Northeast. The East Coast is the highest-consuming gasoline market in america, but it surely has comparatively little refinery capability.

weekly average regular retail gasoline prices by region

Knowledge supply: U.S. Power Data Administration, Gasoline and Diesel Gas Replace

U.S. gasoline costs differ regionally, reflecting native provide and demand situations, completely different gasoline specs required by state legal guidelines, and taxes. Regional gasoline costs are often the very best on the West Coast because of the area’s restricted connections with different main refining facilities (together with the Gulf Coast), tight native provide and demand situations, and necessities for gasoline specs that make gasoline extra expensive to fabricate. West Coast costs as of August 28 had been $4.88/gal, up 2%, or 10 cents/gal, from the identical time final 12 months. The Rocky Mountains area faces comparable logistical constraints because the West Coast, though total provide and demand within the area are each decrease. Rocky Mountain gasoline retail costs averaged $3.98/gal, a 1%, or 4 cents/gal, lower over 2022.

The Gulf Coast accounted for 54% of the nation’s whole refining capability as of January 2023, and it produces extra gasoline than it consumes. In consequence, the value of gasoline on the Gulf Coast is commonly the bottom in america. On August 28, the common retail gasoline worth for the Gulf Coast was $3.38/gal, up 1%, or 2 cents, from the identical time final 12 months.

On the East Coast, retail gasoline costs had been $3.64/gal on August 28, down 1%, or 4 cents, in contrast with the identical time final 12 months. Midwest costs decreased 1%, or 4 cents, to $3.68/gal.

Principal contributor: Alex de Keyserling

Article through U.S. EIA’s At this time In Power weblog.


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