Busy Refineries Push Summer Gasoline Prices Down
Gasoline prices continue to fall.
GasBuddy.com reported Monday that gas prices were "lower than yesterday, a week ago, a month ago, and down" $0.11 per gallon versus a year ago.
GasBuddy added that the most common U.S. price was $3.499, down a dime per gallon from a year ago, while the average price was $3.56 per gallon, down $0.12 from the June 27 peak.
The price was stable Tuesday morning, as the "live ticking average" was $3.556 as of 11 a.m.
Meanwhile, West Texas Intermediate crude -- the benchmark for oil prices in the United States -- rose for the second day in a row ahead of the crude inventory report due Wednesday. The crude inventory is expected to decline to the lowest level since March, according to Bloomberg.
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Data regarding gasoline and other refined product inventories will be released later Tuesday by the American Petroleum Institute and is expected to show those inventories on the rise. Refineries were operating at 93.8 percent of capacity as of July 11, according to the U.S. Energy Information Administration (EIA). The latest number is due from the EIA Wednesday.
Increased gasoline production led IAF Advisors Director of Research, Kyle Cooper to tell Bloomberg last week that, “With refineries running at such high rates, production will increase and a lot of gasoline is going to go into storage.”
The net effect, according to EIA, was a predicted U.S. gas price of $3.48 per gallon for June to December 2014 and a predicted price of $3.38 per gallon for 2015.
Crude oil prices have been affected by the escalating tension with Russia over the Ukraine crisis and downed Malaysian jet. The Israeli-Gaza war and uncertainty regarding when Libya will be able to increase exports add to the upward price pressure and price volatility.
These tensions are a reminder that the macro gas price downtrend can always be disrupted.
At the time of this writing, Jim Probasco had no position in any mentioned securities.
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