Pump price to rise as refineries to shut
The refinery outages amount to lost production
WASHINGTON – U.S. gasoline prices will rise in the near term because as much as 15 percent of U.S. oil refining capacity «could be out for at least another couple of weeks» due to Hurricanes Rita and Katrina, the government’s top energy forecasting agency said..
The refinery outages amount to lost production of about 1.3 million barrels per day (bpd) for gasoline, over 700,000 bpd for distillate fuel and nearly 400,000 barrels bpd for jet fuel, the Energy Information Administration said in its weekly review of the oil market.
Water and wind damage to some of the refineries and the lack of electrical power supply to others is preventing the plants from immediately returning to service, the EIA said.
However, the agency said with «gasoline, distillate fuel and crude oil inventories all at or above the average range for this time of year, it appears that inventories, along with increased product imports, may be sufficient to make up for lost production due to refinery outages for a brief period.»
U.S. gasoline inventories jumped by 4.4 million barrels last week, keeping stocks in the upper range for this time of year, the EIA said. Gasoline imports averaged 1.2 million barrels a day, up sharply from 938,000 bpd the week before.
Petroleum product prices, particularly for gasoline, are expected to increase over the next few weeks because of the shut refineries, the EIA said.
The national retail price for regular unleaded gasoline increased slightly this week to $2.80 a gallon, below the record $3.07 after Hurricane Katrina hit the Louisiana coast on August 29.
Rita hit the Texas-Louisiana border last Saturday. Both storms churned through the Gulf of Mexico, damaging offshore oil and gas platforms.
«However, the longer these refineries remain shut down, the more serious the situation becomes, particularly with the heart of the winter season just a few months away,» the agency said.
Gasoline for October delivery settled up more than 17 cents, or 8 percent higher, to almost $2.34 a gallon at the New York Mercantile Exchange on Wednesday .
The NYMEX price does not reflect the federal and state excise taxes and manufacturing and marketing costs that consumers pay at the pump.