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OIL AND GAS
Refinery issues again pull on retail gasoline prices
by Daniel J. Graeber
Washington (UPI) Nov 3, 2015


Oil tries its hand at a rally
New York (UPI) Nov 3, 2015 - Crude oil prices recovered some lost ground in early Tuesday trading, though outlooks remain uncertain moving into the fourth quarter.

The price for Brent crude oil gained 0.7 percent just before the opening bell in New York to $49.19 per barrel. West Texas Intermediate, the U.S. benchmark price for crude oil, gained 1.1 percent in early trading to $46.66 per barrel.

Crude oil prices are moving lower because an overall increase in production and a general lack of global economic growth is pushing markets toward the supply side. Crude oil prices lost ground Monday after Russia reported an increase in production at the same time that China reported signs of economic contraction.

Russian Central Bank Chief Elvira Nabiullina said Tuesday the market for crude oil is undergoing a structural transformation and oil prices should stay low "for a long period of time."

Crude oil prices could face further pressure from additional supplies from Iran, which said this week it was in talks with major European energy companies about post-sanctions activity.

One week ago, the World Bank said it was lowering its full-year forecast for crude oil prices by $5 per barrel to $52 per barrel. John Baffes, a senior commodities researcher for the bank, said higher inventories of crude oil in storage, coupled with weaker demand, should keep oil prices "persistently low."

Tuesday's early rally may be short-lived as markets await data on U.S. inventories from the American Petroleum Institute and, later, from the U.S. Energy Information Administration. Data show consistent builds in U.S. crude oil inventories, with API reporting an increase of a little more than 7 million barrels last week.

The average retail price for gasoline in the United States was again skewed higher by refinery issues in the Midwest, motor club AAA said.

AAA reports a national average retail price for a gallon of regular unleaded gasoline at $2.19 for Tuesday, a slight increase from the previous day. The rise marks the end of nearly three consecutive weeks of declining gas prices.

Prices in the Midwest were elevated in September because of a refinery issue in Toledo, Ohio. In August, an outage at a BP refinery in Whiting, Ind., one of the nation's largest, pushed some retail prices above the $3 per gallon mark.

Again, the motor club said in its weekly retail market report the Midwest region has experienced "heavy" refinery maintenance because of higher production during the summer's peak driving season.

"Although some of the planned work is beginning to conclude, unplanned outages have further reduced supply and kept prices volatile in the region," AAA's report read.

A refinery in Joliet, Ill., operated by Exxon Mobil is the latest to report an unscheduled maintenance issue. Refinery issues in the region meant four states in the Midwest moved against the national tide with increases in gasoline prices, with Indiana and Ohio reporting prices at least 8 percent higher than last week at some service stations.

"Although refinery production rates are expected to return to normal in the next two months, unplanned outages could keep pump prices volatile in the region leading into the winter months, and possibly put a bit of upward pressure on the national average in the near term," AAA's report said.

Nine states were reporting an average price for gasoline below $2 per gallon. South Carolina had the lowest state average in the nation at $1.88 per gallon.

Recent reports from AAA said the average price for a gallon of gas should be at or below the $2 mark across the country by the end of the year. The national average price is at its lowest for this date in 11 years.


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