This Time, Blame Exports For Rising US Gas Prices
International Business Times
Published Apr 22, 2014 09:04AM ET
Updated Apr 22, 2014 09:30AM ET
This Time, Blame Exports For Rising US Gas Prices
By Meagan Clark - As U.S. drillers are producing more crude than ever and the nation's refineries export products at levels not seen before, the downside seems to be appearing at the pump in the form of higher prices for Americans set to travel this summer.
A new pipeline is relieving a stockpile of oil previously stuck in the middle of the country, moving it to refineries on the Gulf Coast which export growing amounts of gasoline and diesel fuel, the Wall Street Journal reports.
As a result U.S. gasoline stockpiles are at about a three-year low according to the U.S. Energy Information Administration, and prices are about 4 percent higher than a year ago. Regular gasoline in the US averaged $3.68 a gallon on Monday, the highest price since March 2013, according to EIA.
The shale boom benefitted U.S. and flooded the U.S. market with oil in recent years, which kept domestic crude prices low relative to world prices. Low demand during the US economic recovery encouraged refiners to increase exports.
Now U.S. fuel market has is aligning with the global gasoline market to pressure U.S. prices.
Total petroleum exports, mostly gasoline and diesel, increased 25 percent last week from the year-earlier period to average about 3.6 million barrels a day. And analysts say export demand is growing. Research firm ESAI Energy predicts the U.S. will become a net gasoline exporter by 2015.
The EIA estimates US gasoline prices will average $3.57 a gallon between now and September. That’s a penny less than last year. The American Automobile Association estimates prices will range between $3.55 and $3.75 a gallon this summer.
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Written By: International Business Times
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