Gasoline surged to the highest level since November as a rally in the oil market increased costs at the pump ahead of the summer driving season.
The average price of regular gasoline at U.S. pumps rose 21.75 cents to $2.7973 a gallon in the three weeks ended May 15, according to Lundberg Survey Inc., a Camarillo, California-based company that bases its prices on information obtained at about 2,500 filling stations. The fuel, which is 92.52 cents lower than a year ago, climbed to the highest level since the Nov. 21 survey.
Prices are rising after a gain of more than $15 a barrel in U.S. oil futures boosted the costs of producing fuel. A crude oil increase, as well as refinery outages, especially in California, contributed to the rise in pump prices, said Trilby Lundberg, the president of Lundberg Survey.
“California’s own price surge in wholesale and retail because of refinery issues in the state made the U.S. average price jump more than it would have,” Lundberg said in a telephone interview on Sunday. “Stronger U.S. and California demand” also boosted costs, she said.
The highest price for gasoline in the lower 48 states among the markets surveyed was in Los Angeles, at $3.95 a gallon, Lundberg said. The lowest price was in Baton Rouge, Louisiana, where customers paid an average $2.32. Regular gasoline averaged $2.86 on Long Island, New York.
Refinery outages that are shrinking fuel supplies in the western and central U.S. are boosting prices further. Exxon Mobil Corp.’s Southern California refinery has been producing less fuel since a Feb. 18 blaze and the refinery is expected to keep units shut for repairs through June, according to two people familiar with the work. Phillips 66’s Los Angeles plant shut units, including a hydrotreater, early for maintenance, two people familiar with the work said on May 13.
Exxon’s Joliet plant, the second-largest in Illinois, reduced operating rates on May 12 after a breakdown. Citgo Petroleum Corp. was scheduled to shut units at the Lemont refinery in Illinois June 1 for planned repairs, two people familiar with operations there said. Marathon Petroleum Corp.’s 565,000-barrel-a-day Garyville complex in Louisiana took a fluid catalytic cracker out of service on May 12 to repair a leak, according to a person familiar with the work.
West Texas Intermediate crude futures rose 4.4 percent to $59.69 a barrel in the three weeks ended May 15. Prices have risen nine consecutive weeks and have surged 37 percent since hitting a six-year low on March 17.
Gasoline futures on the Nymex rose 2.4 percent to $2.0568 a gallon in the three weeks to May 15. Motor gasoline inventories in the U.S. slipped 0.5 percent to 226.7 million gallons in the seven days ended May 8, U.S. Energy Information Administration data show.
The EIA projected in a May 12 report that regular gasoline would peak this year in May, averaging $2.679 a gallon, and average $2.55 this summer.
“The average household is expected to spend $675 less for gasoline in 2015 compared with last year because of lower prices,” the agency said in its report.