August 23, 2024 [Reuters]- A series of refinery outages in the U.S. Midwest caused regional gasoline prices to spike to more than 20% above the national average from July 22 to Aug. 5 during the high-demand summer driving season, the U.S. Energy Information Administration (EIA) said on Thursday.
WHY IT IS IMPORTANT
The production of gasoline, diesel, and other refined petroleum products was hit hard by unplanned outages during a key demand period as motorists took to the road for summer vacations.
Exxon Mobil its 251,800-barrel-per-day refinery at Joliet, Illinois, in mid-July due to a power outage after a storm. The refinery restarted earlier this month.
In Ohio, Cenovus’ 183,000-bpd Lima and 150,800-bpd Toledo refineries both experienced operational issues in late July.
Midwest refinery utilization fell 11% to 86% from the week ending July 12 to the week ending Aug. 9, according to the EIA.
As these refineries restarted, utilization climbed back up 97% as of the week ending Aug. 16, the EIA said.
CONTEXT
Reduced refinery utilization resulted in significant draws in Midwest gasoline stocks.
Retail gasoline prices in the Midwest, which typically are lower than the national average, stayed elevated for three weeks following the outages, the EIA said, marking the closest the regional average retail price had been to the national average since November 2022.
BY THE NUMBERS
In Chicago, average retail gasoline prices were more than 20% higher than the national average from July 22 to Aug. 5, according to EIA data.
At the end July, Chicago retail prices were 23% higher than the U.S. average, the largest percentage price premium for the city in any week since 2015.
Immediately after the Joliet refinery went offline, Midwest gasoline inventories drew down by 2 million barrels, falling below 2023 levels.
As local refineries re-entered service, the Midwest saw a 1.3 million-barrel build in gasoline inventories in the week of Aug. 16.
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