America Becoming a Net Gasoline Exporter

Since 2005, it seems the energy markets have been turned upside down. In the wake of Hurricanes Katrina and Rita, gasoline prices spiked higher.

It no longer really mattered what OPEC set as the worldwide price of oil - traders on Wall Street and in other financial markets around the world began to set the price. In the six years since, consumers have seen volatile - but mostly higher - prices at the gas pump.

Supply and demand doesn't seem to matter all that much either. For example, U.S. gasoline prices have fluctuated between $3 and $4 a gallon for most of 2011. For many consumers, that seems kind of high, considering prices were as much as a dollar a gallon cheaper for most of 2010.

Consider this; even though gas prices have drifted lower over the last few weeks, they are still relatively high for this time of year. For example, the national average price of self-serve regular gas today is $3.275 a gallon, according to AAA's Fuel Gauge Survey. One year ago the average price was $2.951.

Demand continues to go down

But maybe increased demand for gasoline is driving up prices. No, data from the U.S. Energy (EIA) Information Administration reveals just the opposite is true. Consumers have actually reduced their gasoline demand in the face of higher prices at the pump.

So, what's happening to the excess gasoline produced by U.S. refiners? Why isn't the "glut" driving down the price of fuel? Because there is no "glut." U.S. refiners have increased their export of refined gasoline to other countries.

They keep just enough gasoline in the U.S. to meet domestic demand. That also keeps prices from going down.

89 million barrels in exports

The EIA reports that in the first nine months of this year, U.S. refineries exported a net total 89 million barrels of gasoline, mostly to Brazil and other Latin America countries. That total is expected to increase when fourth quarter numbers are included.

This might make consumers hot under the collar, but industry analysts say it just points up the big changes a global economy has brought to energy markets. U.S.-based refineries sell their products all over the world, not just the U.S.

The refineries, for the most part, are owned and operated by multi-national corporations that consider the world their market. The refineries just happen to be located in the U.S.

This is where the refineries are

Increasingly, they import oil into the U.S. for the sole purpose of refining it into gasoline to sell elsewhere in the world. They do that, analysts say, because the U.S. has more refining capacity than most other countries. This is where the refineries are.

In the future, U.S. refineries might increase their output of gasoline, directing more of it overseas. That would help the economy, create jobs and improve America's balance of trade deficit, economists say.

But if prices at the pump surge back to $4 a gallon next year, as some analysts predict, it may be hard to convince consumers that they're seeing a benefit from U.S. exports of gasoline.