Midwest Madness

By Brian L. Milne, Refined Fuels Editor for DTN

 

Retail gasoline prices will move higher in most metropolitan markets in the United States during the first week of May, pushed up by climbing costs passed through from wholesale markets. May 1 was the deadline for all terminals that supply retail outlets to have summer grade gasoline available, which costs more to produce compared with winter-grade gasoline.

 

The weekly change in wholesale prices was mixed overall, impacted by local market conditions, with Chicago gasoline prices expected to be sharply higher on the week. Parts of Kansas and Missouri will also see a big pop in prices because of a sharp increase in demand.

 

For Chicago, an unconfirmed outage at an Illinois refinery that supplies the region was shut for two weeks of maintenance, sending wholesale gasoline prices, especially for premium grades, sharply higher. The maintenance is for a gasoline producing unit.

 

Also, a refinery in Kentucky was operating at a reduced capacity level because of a closed pipeline that feeds the facility its crude oil, reducing available supply for the region. The pipeline, shut in late April because of a leak, has since returned and the refinery has increased its production level.

 

Nationally, retail gasoline prices were also supported by an unexpected and large decline in gasoline inventory levels. The surprise decrease triggered buying in broader wholesale markets to end April that will be felt at retail outlets this week. However, both demand and supply for the year are on par with lackluster 2008 figures.

 

View DTN’s Weekly and Historical Gas Prices

 

About the Author

Brian L. Milne is the Refined Fuels Editor for DTN-a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for nearly 14 years as an analyst, journalist and editor. He can be reached at brian.milne@dtn.com.

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