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OIL AND GAS
AAA: Refinery issues throttling gas price slide
by Daniel J. Graeber
Washington (UPI) Sep 29, 2015


disclaimer: image is for illustration purposes only

Though U.S. refineries are making a blend of gasoline that's cheaper to produce, maintenance issues are keeping consumers prices elevated, AAA said.

The motor club lists a national average of $2.29 per gallon for Tuesday, relatively unchanged from one week ago. The retail price for a gallon of regular unleaded gasoline is down 20 cents, or 8 percent, from one month ago.

U.S. refineries on Sept. 16 started producing a winter blend of gasoline, which is cheaper to produce because fewer environmental safety measures are necessary during cooler months. This should push retail prices lower.

"Unlike previous years, refinery maintenance season this autumn is expected to be heavier than usual due to refineries operating at higher than normal rates for longer periods over the summer months," the motor club said in a weekly report on consumer prices. "As the refinery maintenance season continues to ramp up, gas price declines could slow and temporarily change direction."

A refinery update from the Oil Price Information Service shows PBF Energy expects work at its refinery in Delaware to be completed by the end of the month. An Aug. 21 fire curtailed operations there, leading to regional market issues.

A unit at a refinery in Toledo closed mid-September, and BP shut down part of its refinery in Whiting for planned maintenance. An outage at Whiting in August pushed some retail prices above the $3 per gallon mark.

On the West Coast, gasoline production at the Exxon Mobil refinery in Torrance, Calif., could be offline until at least next year. OPIS said workers there halted efforts to reduce operational capacity in response to a February fire.

Nevertheless, AAA said market conditions characterized by abundant supplies and lower crude oil prices should keep retail gasoline prices low.

"The market's current oversupply is expected to keep prices relatively low, and barring any unexpected price spikes, consumers should continue to experience significant yearly savings at the pump approaching the end of the year," it said.


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