LI gas prices up as crude oil supply drops
Gasoline prices rose by almost 8 cents a gallon on Long Island in the past week, mostly on higher crude oil prices and tight supplies from refinery downtime.
Regular averaged $3.815 a gallon on Long Island Thursday morning, the AAA said, up 7.7 cents from a week earlier.
Crude oil prices are rising on a combination of generally positive economic news worldwide, combined with growing demand from China and a cutback in production by the OPEC cartel, said analyst Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc.
The benchmark grade of U.S. crude oil has risen from the mid-$80s a barrel in early December to the mid-$90s in recent weeks. It settled Thursday down 45 cents at $97.49 a barrel on the New York Mercantile Exchange. "The rising prices are going to be passed through to the consumer and I expect gasoline prices are going to rise another 10 or 15 cents from where they were yesterday," Lipow said.
Meanwhile, inventories on the East Coast are tight, most recently from the shutdown for five weeks of maintenance of Philadelphia Energy Solutions' refinery in Philadelphia and technical problems affecting gasoline production at a Delta Air Lines refinery in Trainer, Pa., Lipow said.
Gasoline stocks on the East Coast are 12 percent lower than at this time last year, said the U.S. Department of Energy. Demand is off by only 1 percent to 4.7 percent along the East Coast, according to the weekly MasterCard SpendingPulse report.
Such shortages normally are alleviated by increased imports from abroad and from the U.S. Gulf region, but imports are constrained by refinery maintenance in Europe and competition for the gasoline from other countries. Pipelines from the U.S. Gulf are running at capacity, Lipow said.
Gasoline prices are being pushed upward also by anticipated further shortages from the announced closure by the end of next month of a Hess refinery in southern New Jersey, which accounts for 7.5 percent of Northeast production.
Tight supplies have become chronic on the East Coast since the closure in late 2011 of a Sunoco refinery in Marcus Hook, Pa., and the closure last year of another Hess refinery, in St. Croix. What is now the Delta refinery also was closed for a time last year.
The AAA on Monday said New York had the highest gasoline prices of any state except Hawaii.
Heating oil, meanwhile, averaged $4.272 a gallon on Monday at full-service dealers on Long Island, the state Energy Research and Development Authority said, the highest price since early December and 10.5 cents higher than a year earlier.