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Gasoline prices may keep rising due to shortage of summer grade gasoline

Gasoline prices may keep rising due to shortage of summer grade gasoline

U.S. gasoline prices rose again at the pump Friday, extending a trend that analysts believe will continue until mid-September because of an end-of-season shortage of summer blend gasoline.
Refiners are running low on summer-grade gas, a mixture designed to emit fewer pollutants, analysts said. Refiners try to run down their supplies of the more expensive summer grade gas just in time for Sept. 15, when stations can legally begin selling winter grade gas, he said. But this year, that run down came a little early.
"There isn't a lot of summer gasoline that's been kept at the ready," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service.
In many markets, he said, "you're going to see a retail price pop" as supplies run short.
Gas prices at the pump rose 0.8 cent overnight to a national average of $2.777 a gallon (73 cents a liter), according to AAA and the Oil Price Information Service. It was the third increase in as many days.
Energy futures, meanwhile, ended mixed after a "storm premium" that earlier lifted natural gas prices appeared to evaporate. The National Hurricane Center said a tropical disturbance in the central Atlantic is strengthening and could become a tropical depression, but the storm's track was far from certain.
In the futures market, investors are not willing to bid prices sharply higher as they did when Hurricane Dean threatened the Gulf of Mexico two weeks ago, Kloza said. Dean largely missed oil and gas installations in the Gulf.
"There is a little bit of a 'cry wolf' syndrome here," Kloza said.
Natural gas prices fell 16.7 cents to settle at $5.468 per 1,000 cubic feet on the New York Mercantile Exchange.
Oil prices, which aren't as sensitive to storm tracks, added 68 cents to settle at $74.04 a barrel on the Nymex on government reports that consumer spending and factory orders rose in July. Energy investors pay close attention to economic data because the economy's strength is seen as a barometer of demand for oil and gasoline.
October Brent crude futures added 79 cents to settle at $72.69 a barrel on the ICE Futures exchange in London.
Nymex gasoline futures have moved higher over the last week and a half on news of falling inventories and refinery activity. Many analysts believe the current price increases are also due to retailers stocking up to supply Labor Day weekend drivers. Few expect a return to the record price of $3.227 a gallon (85 cents a liter), hit in late May.
The September gasoline contract, which expired after Friday's Nymex session, fell 2.82 cents to settle at $2.0519 a gallon on the Nymex after rising more than 2 cents earlier.
Trading in expiring contracts is often volatile as investors buy or sell to square positions. The October gasoline contract rose 0.48 cent to settle at $1.9645 a gallon.
September heating oil, which also expires Friday, added 1.38 cents to settle at $2.0444 a gallon.


Updated : 2020-12-01 08:26 GMT+08:00