Fredericksburg Leader

NATIONAL AVERAGE KEEPS RISING DUE TO REFINERY CHALLENGES, CHINA REOPENING COULD PROLONG RISING PRICES

For the second consecutive week, the nation’s average gas price has risen, climbing 8.2 cents from a week ago to $3.25 per gallon yesterday according to GasBuddy data compiled from more than 11 million individual price reports covering over 150,000 gas stations across the country. The national average is unchanged from a month ago and 3.6 cents per gallon lower than a year ago. The national average price of diesel has fallen 2.1 cents in the last week and stands at $4.64 per gallon.

“Last week, the rise in gasoline prices continued, still due to previous refinery outages caused by the cold weather the week of Christmas. However, I’m optimistic that as refiners get back online, we could see the increases slow down as we head into the time of year when gasoline demand is at its weakest,” said Patrick De Haan, head of petroleum analysis at GasBuddy. “While gasoline prices have rallied, average diesel prices continue to drift lower, which certainly bodes well for the overall economy. As long as refiners are able to get back online soon from previous cold-weather outages, we could see supply start to recover at the same time demand is weak, which could bring gas prices down again. The window of opportunity, however, is shrinking, and by late February or early March, we’ll likely kick off the seasonal rise in gasoline prices.”

OIL PRICESOil markets were solidly in the black to start the first full-length trading week since mid-December, as China issued fresh import quotas for crude oil, driving up demand and pushing oil prices higher. In early Monday trade, a barrel of West Texas Intermediate crude oil was up $2.34 per barrel to $76.11, still, a nearly $3 drop from last week’s $79.24 per barrel level from Tuesday. Brent crude oil was up $2.21 to $80.78 per barrel, still some $4 per barrel lower than last Tuesday’s $84.95 print. While demand is slumping in the U.S. as we enter a bit of hibernation in the winter, China’s reopening plans have put the spotlight on oil consumption which may rise sharply in China, along with economic activity as travel restrictions are loosened.

According to Baker Hughes, last week’s U.S. rig count was down 7 rigs to 772 and was 184 rigs higher than a year ago. The Canadian rig count rose 105 to 189 and was 48 rigs higher than a year ago.

OIL AND REFINED PRODUCTSLast week’s report from the Energy Information Administration showed oil inventories jumping as refineries struggled with the arctic blast from Christmas, with oil inventories up 1.7 million barrels per day as refinery utilization plummeted 12.4 percentage points to just 79.6% as cold-weather related shutdowns surged. The SPR fell 2.7 million barrels, while domestic crude oil production rose 100,000bpd. Gasoline inventories fell by a measured 300,000 barrels, while distillates fell by 1.4 million barrels. Implied gasoline demand plummeted to 7.51 million barrels as holiday demand dropped, and Americans pre-filled ahead of the blizzard, reducing their need to fill during the Christmas week. Total U.S. oil supply stands 10.5 million barrels higher than a year ago, excluding the SPR. Including it, stocks are down 210.8 million barrels.

FUEL DEMANDAccording to GasBuddy demand data driven by its Pay with GasBuddy card, U.S. retail gasoline demand rose 1.8% last week (Sun-Sat) as demand saw some improvement coming off the holidays. Broken down by PADD region, demand rose 0.8% in PADD 1, rose 1.8% in PADD 2, rose 2.4% in PADD 3, rose 2.0% in PADD 4, and rose 3.5% in PADD 5.

GAS PRICE TRENDSThe most common U.S. gas price encountered by motorists stood at $3.29 per gallon, up 30 cents from last week, followed by $3.19, $2.99, $2.89 and $3.09 rounding out the top five most common prices.The median U.S. gas price is $3.19 per gallon, up 10 cents from last week and about 6 cents lower than the national average.The top 10% of stations in the country average $4.11 per gallon, while the bottom 10% average $2.72 per gallon.The states with the lowest average prices: Georgia ($2.77), Texas ($2.83), and Mississippi ($2.88).The states with the highest average prices: Hawaii ($4.95), California ($4.35), and Nevada ($3.91).

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