Wholesale gasoline postings moved higher in most major metropolitan markets across the country during the week ended Mar. 24, underpinned by higher crude acquisition costs, seasonal refinery maintenance, and the transition to lower Reid vapor pressure ratings for gasoline as the industry swaps out winter blends with lower RVP summer gasoline.
Higher wholesale costs continue to make their way to the pump, with the Energy Information Administration last reporting the national average price for regular grade gasoline at a $3.547 gallon six-month high. The US average, which is roughly 15cts lower than during the comparable year-ago period, is poised to continue its advance into April.
The ascent in gasoline prices aligns with the motor transportation fuel’s seasonal tendency to increase this year amid the transition in gasoline specifications and shoulder period scheduled maintenance at refineries known as turnarounds, and expectations for higher demand during the summer months. The price climb is known as the pre-season rally ahead of this peak demand.
Growth in gasoline demand has been tepid however, declining annually in 2008 and 2009 after peaking in 2007, with gasoline demand increasing in 2010 to 19.18 million bpd that was higher than in each year through 2013 EIA data shows. Gasoline demand increased 2.1% in 2013 from 2012 to 18.887 million bpd.
The American Petroleum Institute reported Mar. 20 that gasoline demand in February dipped 0.2% from the year prior period but rose 1.1% from January to average 8.4 million bpd. It was the lowest rate of demand for gasoline during the month of February in 13 years.
The API data was followed by a report from the Federal Highway Administration that showed Americans drove 2.9 billion or 1.3% fewer miles in January than they did during the corresponding period in 2013. A regional breakdown of the data shows that the bitter cold and snowy month of January might have been a critical factor in the lower Vehicle Miles Traveled.
FHA, a division of the Department of Transportation, showed a steep 4.6% drop in VMT for the North-East region in January from year prior, a 1.8% contraction for the South-Atlantic, and a 4.0% decline for the North-Central region of the United States. In contrast, VMT in the West, which escaped the vicious winter weather seen across most of the US, jumped 2.9% on the year while edging up 0.3% in the South-Gulf.
About the author
Brian L. Milne is the Energy Editor for Schneider Electric—a global specialist in energy management. Milne has been focused on the energy industry for 18 years as an analyst, journalist and editor. He can be reached at firstname.lastname@example.org.