Nationwide trends for gasoline continue on a trajectory that suggests flat to lower prices this month, but many Midwestern states may see some price increases this weekend, GasBuddy analysts warned Thursday. The price hikes are related to refinery issues suffered by no less than four Midcontinent refineries in the last ten days.
A refinery in El Dorado, Kansas operated by HollyFrontier has operational issues, and a fire has knocked out the key Coffeyville Refining plant in Coffeyville, Kansas. Further north, BP’s huge refinery in Whiting, Indiana is operating at reduced rates thanks to maintenance that is ongoing with a crude unit, and ExxonMobil has shut part of its Joliet, Illinois refinery for work on a desulfurization unit.
In all, these four refineries represent nearly 900,000 barrels per day of U.S. refined production although ongoing problems are restricting less than half of that production. Still, the issues pushed wholesale gasoline prices up by about 14cts gal in Oklahoma, Kansas and many Great Plains and Great Lakes’ states this week.
GasBuddy stresses that Midwestern increases are not part of a new long term uptrend. “You’ll see some price increases after 40 days of steady decreases, but this is NOT a second win for lofty gas prices,” said Tom Kloza, chief oil analyst for GasBuddy. “We may see sub-$3 gal prices disappear in some states where they popped up recently, but those numbers will be back in autumn.”
GasBuddy analysts noted that crude oil prices have continued to drift lower, and suggest that sharp decreases in motor fuel will occur when fuel specifications shift to autumn and summer blends less than 40 days from now.