GasBuddy says: Expect aggressive increases at the pump following this week’s wholesale price spike
CHICAGO – The transition from ‘winter blend’ to ‘summer blend’ gasoline always brings increases in retail gasoline prices, but nothing you’ve seen over the past year is likely to match what GasBuddy anticipates over the next two to three weeks.
“Wednesday brought a big price rally in gasoline markets and gasoline wholesalers are seeing huge increases,” said Patrick DeHaan, senior petroleum analyst for GasBuddy. “Wholesale prices today alone have increased coast to coast from 10 to 27 cents per gallon; and when you add that on top of the increases that occurred earlier this month, it’s inevitable that retail prices will climb aggressively in weeks ahead.”
“Just since Monday, Feb. 2, wholesale prices nationwide have increased by an average of 54 cents per gallon,” DeHaan added. “And the west coast, by far, has seen the steepest increases, with Los Angeles wholesale pricing up $0.96/gal., ; San Francisco up $0.84 and the Pacific Northwest up by $0.73.”
While some of the rally is attributed to the seasonal decline in gasoline inventory; reduced refinery output and the shift to summer grades of gasoline, there have also been significant operational issues at refineries in five states. And of course, the United Steelworkers Union strike that began Feb. 1 exacerbates operations at 12 refineries where they’ve imposed ‘work stoppages’ in California, Texas, Louisiana, Indiana, Kentucky and Ohio.
“Volatility is the name of the game right now and we expect that to translate into 10-cent increases in retail gasoline, week after week over the next two to three weeks, with larger, more immediate increases in West Coast areas,” DeHaan said.