U.S. refinery shutdowns drive gas prices higher

Gasoline prices continue to rise in the wake of news that various refineries across the country shut down last week, over what is being called “some refinery issues,” according to a spokeswoman for AAA The Auto Club.

Jessica Brady said the shutdowns caused gasoline output to be reduced by 2.8 percent, to 8.5 million barrels a day, and the U.S. Department of Energy reported that figure as the lowest output level since February of 2010.

U.S. gasoline inventories decreased by almost 400,000 barrels, when they had actually been predicted to increase by 2 million barrels, explained Brady. This is the first fall in gas inventories in a month, and it was coupled with a rise in demand, to 8.1 million barrels a day.

Brady said other factors contributing to the escalating prices of oil and gas are some optimism over talks aimed at resolving Greece’s debt problems, and the European Union’s formal notice that it will enact sanctions against Iran, starting July 1.

Iran continues to threaten to block the Strait of Hormuz, if the union follows through on the sanctions, Brady added. The Strait of Hormuz is critical to the industry, because one-fifth of the world’s oil supply passes through it.

The price of a barrel of oil closed, on Jan. 27, at $99.56 on the New York Mercantile Exchange, which is $1.10 higher than the prior week, Brady said. “Although oil prices remain near $100 a barrel, retail gas prices continue to rise at a steady pace,” she said. “Concerns of dwindling supplies from refinery shutdowns in the U.S ... are driving pump prices higher.”

In Georgia and Florida, the average price of a gallon of regular unleaded gasoline increased by 5 cents from the week before, she said. Motorists in the Peach State are paying $3.45 a gallon, and drivers in the Sunshine State are paying $3.55 a gallon.

Tennessee’s average price is at $3.33 a gallon, an jump of 6 cents from the week prior, she said. The national average price rose by 4 cents, and is currently at $3.42 a gallon.