Indiana refinery woes among factors fueling rising gas prices

BOSTON (Aug. 22)- For just the first time this summer, the U.S. national average for a gallon of gasoline has risen versus a week ago. The average rose to $2.17 per gallon, up four cents versus last Monday, according to price-tracker GasBuddy.com which supplies the data for wane.com’s Gas Gauge.

A total of 44 states saw average gas prices rise versus a week ago while just 6 saw declines. Leading states that saw changes: Indiana (+10 cents), Kentucky (+10 cents), Delaware (+10 cents), Michigan (+8 cents) and Ohio (+8 cents). A total of 38 states saw prices rise by more than a penny per gallon versus a week ago, while the remaining 12 saw prices rise by less than a penny or fall. Leading the few decliners was Alaska (2 cents), Utah (2 cents), Wyoming, Hawaii, Idaho (-1 cent).

GasBuddy analysts say much of the jump at the pump was fueled by rising oil prices on optimism of a future production cut, which may be led by OPEC. A barrel of West Texas Intermediate crude oil jumped to nearly $48 per barrel while Brent crude oil traded at $50 per barrel, remarkable rebounds of nearly $10 per barrel in just a few weeks. However to start this week, the optimism appears to be fading, with crude oil prices struggling to maintain their recent bull run. In addition, CFTC data showed short interest fading, signaling that there are fewer buyers interested at current prices.

Last week’s Energy Information Administration report didn’t help either, showing a combined 5.2 million barrel decline between oil inventories and gasoline inventories. Meanwhile, some refinery issues have crept to the surface out West and in the Midwest. BP’s Whiting, Indiana refinery has been struggling for weeks with a water treatment facility slashing capacity. Problems at a Valero refinery in Wilmington, CA and several malfunctions and fires at Gulf Coast refiners has led to less production in those regions as well, impacting gasoline prices.

Though it has risen, the national average, however, still stands some 46 cents per gallon lower than the same day a year ago, when the national average checked in at $2.62/gallon. A year ago some 99.9% of the nation’s gas stations were selling gasoline at over $2 per gallon, while today, 66.3% are selling at that level. Simple calculus shows us that 33.7% of gas stations in the U.S. are selling at $2 or less.

GasBuddy’s gasoline scoreboard shows the West dominating the most-expensive gasoline, with Hawaii ($2.69), California ($2.66), Washington ($2.58), Alaska ($2.52), Idaho ($2.44), Oregon ($2.42), and Nevada ($2.41) taking the first seven of the top ten spots. On the opposite end of the spectrum, one finds the South again dominates the cheapest ten: South Carolina ($1.86) had the nation’s lowest average, followed by Alabama ($1.90), Mississippi ($1.92), Tennessee ($1.95), Virginia ($1.95), New Jersey ($1.96), Arkansas ($1.98), Louisiana ($1.98), Texas ($1.98) and North Carolina ($2.00). South Carolina sees 96.9% of all gas stations at $2 per gallon or lower.

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