Any other disruption, such as a hurricane driven by record-hot ocean temperatures, could send gas prices shooting up, De Haan said. As of last week, gasoline inventories were 7 percent below normal and diesel in storage was down 14 percent, according to the Energy Information Administration. It’s likely to hold off on purchase as long as the market continues to sit on a knife’s edge. The Biden administration withdrew 180 million barrels from that reserve starting in March 2022, bringing the stockpile to its lowest level since the 1980s amid disruptions to the oil market caused by the Covid-19 pandemic and Russia’s invasion of Ukraine.Ī spokesperson for the Department of Energy, which manages the SPR, did not respond to questions on when it would seek another purchase of oil for the reserve. The agency canceled a planned purchase of 6 million barrels of oil for the Strategic Petroleum Reserve this week after oil prices climbed above the department’s target price range of $67 to $72 a barrel. The Energy Department is feeling it, too. “As long as the price of oil goes up, we’re going to continue to see some upward pressure on prices.”
“Some of the heat has moved on, but some of the problems are still left behind,” De Haan said. Last week, WTI crude prices topped $80 per barrel for the first time since April. dollar - have helped boost crude oil prices. Those cuts - as well as strong fuel demand in China and the U.S. The Saudis have pledged to maintain their own 1 million barrel-per-day production cut through September. OPEC+ members are expected to extend their voluntary oil production cuts at a meeting later this week, led by Saudi Arabia and Russia. crude prices touched a four-month high this week. Of course, the oil markets are on a bit of a boil at the moment as well, exerting upward pressure on prices at the pump during the busy summer driving season, normally the time of highest fuel demand in the United States. “For facilities that do experience high heat, many have cooling systems in place to help them address heat-related operational challenges and keep workers safe,” the AFPM spokesperson said. refineries have suffered some unplanned outages this season that can be attributed to weather as well as unexpected maintenance after “extended periods of high utilization.” That’s an ominous sign as the planet heads toward what scientists say could be a record warm year - coming just seven years after the previous record.Ī spokesperson for the trade group American Fuel and Petrochemical Manufacturers said in a statement that U.S. And even the refineries that are still churning away are likely producing less because petroleum expands in high temperatures, he said.
At least four fuel-making plants in Texas and Louisiana - the states that are home to half the nation’s refining capacity - have suffered outages at least in part due to heat in recent weeks, according to Patrick De Haan, head of petroleum analysis at GasBuddy.
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