NEW YORK, Aug 22 (Reuters) – A series of refinery outages in the U.S. Midwest led to a surge in regional gasoline prices, which spiked more than 20% above the national average from July 22 to August 5, according to the U.S. Energy Information Administration (EIA) on Thursday.
Impact of Outages
The outages, which occurred during the peak summer driving season, significantly disrupted the production of gasoline, diesel, and other refined petroleum products. Motorists, traveling for summer vacations, faced higher prices due to these disruptions. Exxon Mobil halted operations at its 251,800-barrel-per-day refinery in Joliet, Illinois, in mid-July following a power outage caused by a storm. The refinery resumed operations earlier this month.
In Ohio, Cenovus experienced operational issues at its Lima and Toledo refineries in late July. The Lima refinery processes 183,000 barrels per day, while the Toledo facility handles 150,800 barrels per day.
Refinery Utilization and Price Trends
Midwest refinery utilization dropped by 11%, falling to 86% from the week ending July 12 to the week ending August 9. However, as refineries restarted, utilization increased to 97% by August 16, according to the EIA.
The reduced refinery output led to a significant decrease in gasoline stocks in the Midwest. Retail gasoline prices in the region, which are usually lower than the national average, remained elevated for three weeks after the outages. This marked the closest the regional average retail price had been to the national average since November 2022.
Price Data
In Chicago, average retail gasoline prices were over 20% higher than the national average from July 22 to August 5, EIA data shows. By the end of July, Chicago prices were 23% above the U.S. average, the highest premium for the city since 2015.
Following the shutdown of the Joliet refinery, Midwest gasoline inventories dropped by 2 million barrels, falling below levels from earlier in 2023. As refineries began operating again, inventories increased by 1.3 million barrels in the week of August 16.