U.S. Gasoline Stockpiles Fall In Last Week

Just as oil prices plunged on world markets, refinery problems in the U.S. resulted in a drop in gasoline supplies, which can be expected to take some of the downward pressure off retail gasoline prices.

Retail gas prices have been falling in the last two weeks, but at a slow pace. This week two reports – one from the American Petroleum Institute (API) and the other from the U.S. Energy Information Administration (USEIA) - showed a sizable drop in gasoline stockpiles, though supplies remain at high levels.

API reported that gasoline stockpiles were down by 5.37 million barrels in the week that ended August 12. Refinery output was down by 205,000 barrels per day from the previous week, with refineries operating at 89.1 percent of their capacity.

Today the USEIA report showed a smaller draw-down in gasoline supplies – 3.5 million barrels.

Refinery problems

At the same time, U.S. crude oil supplies rose, with less of it being refined into gasoline. Andy Lipow, president of Lipow Oil Associates LLC in Houston, told Bloomberg News that the drop in supply is likely due to “a number of refining problems.”

Earlier this year a significant drop in crude oil prices failed to produce much in the way of similar gas price declines because of concerns that Mississippi River flooding would would disrupt Louisiana-based refining operations. Those concerns turned out to be unfounded.

Oil prices are currently down about 15 percent from recent highs. The national average of self-serve regular gasoline, meanwhile is $3.584 a gallon, according to AAA. That's down about three percent from its recent high of $3.70 a gallon.