API says US gasoline prices are 20% off May peak

By the OGJ Online Staff

WASHINGTON, DC, June 27-- The American Petroleum Institute said Wednesday that US gasoline prices dropped another 6¢/gal to an average of $1.538/gal (including taxes) during the week of June 22.

API said the price of regular gasoline is now almost 20¢/gal below May's high.

It said gasoline prices generally track those of crude oil, which are subject to worldwide supply and demand conditions. "So far this year, the US has imported more than 60% of its petroleum needs and is dependent on world oil markets. Since crude oil costs represent the largest component of the price of gasoline, fluctuations in crude oil prices are the most important cause of gasoline price swings over the long term.

"Though it has accelerated considerably in recent months, gasoline production early this year was often slower than during the same period in 2000 due to high heating fuel demand during an unusually cold winter. Refineries have operated at very high levels of activity, but increased production of heating oil generally means reduced production of gasoline and other fuels."

API said for the week ending June 22, year-to-date production of distillate fuels (heating oil and diesel fuel) was 3.9% higher than the same period last year.

It said year-to-date production of residual fuel (used in electricity generation) is 21% higher and total inputs into the nation's 152 refineries have increased 2.5%.

It said US refineries have operated at 92.4% of capacity so far this year, nearly 2 percentage points higher than during the same period last year. In the most recent week, utilization was 94.2%.

API said gasoline production has set time-of-year records for 11 straight weeks as refiners maximize output for the summer driving season.

Gasoline inventories were up 3.7 million bbl during the week ending June 22, up 9% from the same time a year ago, and have risen more than 30 million bbl since the beginning of April.

"The completion of the transition from winter-grade to summer-grade reformulated gasoline (requiring the near emptying of storage to handle the more stringent specifications of the summer blend) appears to have affected RFG inventories. Nationwide RFG inventories rose to 20% above last year's level and 12% above average for this time of year," API said.