Demand pressures, refinery woes push gas prices higher

AAA reports a handful of states are pulling the national average price for gasoline higher.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   June 7, 2016 at 6:21 AM
share with facebook
share with twitter
| License Photo

WASHINGTON, June 7 (UPI) -- Increased demand and pressure on the nation's refineries have left U.S. consumers paying the highest so far this year for gasoline, a market report finds.

Motor club AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.36 for Tuesday, up 1.5 percent from last week and 6.4 percent higher than one month ago. With the summer driving season in place following the long Memorial Day holiday weekend in the country, more drivers are hitting the road and pushing markets heavily toward the demand side.

"Tightening supply combined with strong gasoline demand contributed to pump prices moving higher over the past week," the motor club said in its weekly retail market report. "Drivers are taking to the roads at a record-setting pace, and gasoline demand remains on target to reach unprecedented highs during this year's summer driving season."

For the week ending June 3, the U.S. Energy Information Administration reported total gasoline production increased to 9.9 million barrels per day. Inventories, meanwhile, declined by 1.5 million barrels, but stockpiles remain above average.

AAA said production of gasoline on average is keeping pace with demand, though some regional markets are skewing the national average price per gallon higher. California, which had seen some relief at the pump, is faced with reduced gasoline production because of problems at two of the state's largest refineries. Two of the top three states with the highest national average price for gasoline in the Lower 48 are on the West Coast.

Michigan has the third highest average price among states in the Lower 48 because of problems at a Marathon refinery in Detroit and regional pipeline outages. Gov. Rick Snyder on Friday extended a state of energy emergency for seven days because of "concerns over the availability of petroleum."

According to AAA, refinery issues have pushed Midwest gasoline prices higher over the past month, leaving regional drivers with some of the highest gasoline prices in the nation.

"Refineries in the Midwest have recently increased production to the highest rates since March, though output continues to lag behind last year's levels," it said. "There is hope that the region might soon experience price relief if production continues to increase."

Michigan gas prices moved lower by a penny overnight to $2.59 per gallon. Mississippi has the lowest state average price in the country at $2.11 per gallon.

Related UPI Stories
Topics: Rick Snyder
Trending Stories