US retail gasoline prices reached an average $2.67/gal on June 15, nearly 60¢ above their average on May 4, the US Energy Information Administration reported. Higher oil prices were the primary culprit, American Petroleum Institute officials told reporters.
"Most analysts have seen an improvement in the worldwide economy, which has helped several commodities including crude oil," API Chief Economist John C. Felmy said. Production cuts by the Organization of Petroleum Exporting Countries, whose members apparently are showing more discipline than usual, also contributed, he said.
Ronald Planting, API's statistics director, added, "We've had some demand growth for gasoline, not terribly strong but much more than for other products. The industry is producing near-record amounts."
Refinery utilization rates have held up better than rates for US manufacturing as a whole, Planting said, adding that at 84%, it's 20 percentage points higher than the domestic manufacturing average, he said.
The average US retail gasoline price should reach its summer seasonal peak in July, with a monthly average near $2.70/gal, EIA said in its latest short-term energy outlook on June 9.
Gasoline demand rises
EIA expects overall oil products demand to drop by an average 550,000 b/d this year because of the weakened US economy, but it anticipates a 30,000 b/d increase in average gasoline demand because of significantly lower prices and stabilized disposal incomes.
API's Felmy said, "Right now, gasoline costs about $1,700-1,800 of the consumer's yearly budget, down about $1,000 from a year ago."
The US Senate Energy and Natural Resources Committee has been preparing an energy bill with several provisions. But other committees on both sides of the Capitol seem more concerned with closing what they consider commodity trading loopholes that contributed to 2008's dramatic oil price spike.
‘Transparency and oversight'
Senate Agriculture, Nutrition, and Forestry Committee Chairman Thomas R. Harkin (D-Iowa) noted in a June 4 hearing that he introduced a bill earlier this year which would require all futures contracts to trade on regulated exchanges.
"For many years, derivative contracts have traded very efficiently and openly on regulated exchanges. We have seen the damage done by moves to circumvent properly regulated derivatives trading," Harkin said.
On June 12, the US Commodity Futures Trading Commission used authority it received from Congress in 2008 for the first time to examine whether a contract traded on the Intercontinental Exchange performs a significant price discovery function and should be regulated.
Felmy remained skeptical that speculation was driving the current gasoline price rise. More normal summertime demand certainly is playing a role, he conceded. "But I think the increase in crude prices has played a bigger part," he said.
