EIA: US Midwest gasoline prices returning to normal

The resumption of refineries across the US Midwest has contributed to gasoline prices in that area falling closer to normal, according to the US Energy Information Administration.

“Fuel prices in Minnesota and North Dakota have fallen to below the current US average gasoline price, and prices in Michigan, Indiana, and Illinois are heading lower with the return of regional refinery production,” EIA reported.

Midwest prices were pushed up in April and May by longer-than-expected refinery outages and lowered gasoline production and inventories.

“Between mid-April and mid-May, Midwest gasoline inventories declined by 6 million bbl (11%) before recovering as refineries returned to normal operations and as gasoline supplied from other regions reached the Midwest,” EIA said.

During disruptions, gasoline is supplied to the Midwest by pipeline and barge from other regions of the country, mostly from the Gulf Coast.

Price volatility is hence amplified given the distances involved and resupply time, EIA said. Since April, Midwest gasoline prices varied in a range three times that of US average prices.

BP PLC has started up a 250,000-b/d crude distillation unit at its Whiting, Ind., refinery. The unit returns the Whiting refinery to its 413,000 b/d nameplate processing capability and clears the way for remaining upgrades of new coking and hydrotreating units, the company said (OGJ Online, Feb. 1, 2011).

Contact Conglin Xu at conglinx@ogjonline.com.

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