Declining Gasoline Inventories Spark Higher Prices at the Pump
WASHINGTON, D.C. --- Over 12 straight weeks during February, March and April, total gasoline inventories declined by a cummulative total of more than 34 million barrels, or 15 percent, according to the Energy Department. This is the sharpest decline in gasoline inventories over a consecutive 12-week period in recent history.
If imports continue at such levels and more domestic refinery capacity returns online, supplies will improve and wholesale prices could come down. However, with gasoline inventories likely to remain low all summer, retail prices are expected to remain close to $3 per gallon during the entire summer season.
Lower import levels than last year, combined with several refinery outages, have slowed supply growth at a time when demand continues to grow --- even with prices around $3 per gallon, the Energy Department's Energy Information Administration (EIA) said. Demand growth has slowed somewhat in recent weeks. But over the four-week period ending May 11, preliminary data suggest that gasoline demand is still 1.0 percent (or nearly 100,000 barrels per day) greater than year-ago levels.
Domestic gasoline production has risen by more than 500,000 barrels per day in the last three weeks. Total gasoline imports (including blending components) during the week ending May 11 rose above 1.5 million barrels per day. That same week saw the fifth highest weekly import volume ever and the highest since last May.
Prices could rise again toward the end of summer if demand surges, as it often does, in late July and August. But without any major petroleum infrastructure problems or overseas disruption in supplies, the average national retail price for regular gasoline is not expected to rise much beyond its present range, the EIA said.