U.S. gas prices at 4-year high as oil exports hit new record

(The Center Square) – United States gasoline prices pushed higher for the sixth consecutive day Wednesday, reaching $4.23 a gallon, as federal data released midmorning showed domestic inventories of crude oil and motor fuels fell for the 12th week in a row while the nation’s exports hit a new record high.

U.S. Energy Department data released at 10:30 A.M. ET showed the nation’s crude oil exports hit a record high 6.44 million barrels per day in the seven-day period ending on April 24, about 810,000 barrels a day more than the previous record high of 5.63 million barrels a day set in the third week of February in 2023.

While exports surged, domestic stocks of crude oil, gasoline, and diesel fell sharply. Before the war began in the Middle East, which closed the Strait of Hormuz to most ship traffic, global oil and motor fuels markets were awash in supply. While total inventories of most key U.S. petroleum products hover just below seasonal norms, diesel supplies remain the critical outlier, stuck at levels well below the five-year average for this time of year.

At 103.6 million barrels, U.S. diesel supplies are about 11% below the seasonal average for the end of April. Because diesel powers most of the nation's freight trucks, farm equipment, and construction machinery, the price increases threaten to drive up the cost of everything from spring planting to grocery deliveries.

Energy Secretary Chris Wright, in Croatia Tuesday promoting the country’s energy products at a summit of government officials in Dubrovnik, said in an interview with Bloomberg television that the world’s gasoline, diesel, and jet fuel buyers are enduring “a period of discomfort to solve a 47-year crisis” in Iran.

Wright said the administration wants U.S. refineries to ramp up production. “If we didn't export our diesel and jet fuel, we'd have to turn down our refineries. Who would want to turn down their refining capacity in today's world?” Wright said in the interview. “At higher utilization rates, throughput and production are higher, allowing the refineries to run efficiently and produce more.

While exports of U.S. crude oil and gasoline surged during the week, Energy Department data showed the nation’s refineries operated at below peak efficiency, due in part to seasonal factors. The refinery utilization rate—a measure of how much crude oil these plants are running as a percentage of their maximum capacity—dropped to 89.1%, down from 89.6% the previous week and below the 90.0% level analysts consider the baseline for optimal operations.

The administration wants to increase the utilization rate at America’s refineries to benefit consumers, the energy secretary said. “That puts a downward pressure on prices, not just in the United States but for everyone abroad,” said Wright. “That's what America's about, bringing more energy to the world and pushing prices down.”

Wright said the administration has taken other measures to boost motor fuel supplies, including the approval of increased blending of ethanol in gasoline. The energy secretary noted that EPA recently issued an emergency waiver to allow year-round, nationwide sales of E15, a blend of 85% gasoline with up to 15% ethanol, which is typically restricted to summer months.

Benchmark oil futures prices around the world settled at near four-year highs Wednesday as the conflict in the Middle East entered the 63rd day, U.S. West Texas Intermediate crude oil futures for delivery in June rose $6.95 or 6.96% on Wednesday to settle at $106.88 per barrel, a four-year high.

Brent Crude oil futures, the global benchmark, jumped 6.08% on Wednesday to finish the day at $118.03 a barrel, marking the second highest settlement price in almost four years.

Gasoline prices spiked by more than a dime in several major markets between Tuesday and Wednesday. According to AAA, Ohio’s average for regular grade jumped 13.4 cents to reach $4.22. This price spike comes as two regional refineries cut production to perform seasonal maintenance and the Whiting facility near Chicago – the largest in the Midwest – worked to recover from a Sunday power disruption.

Gasoline prices rose by more than a dime in key markets from April 28 to April 29. According to AAA Data, the price of regular grade gasoline in Ohio jumped 13.4 cents, rising to $4.22 on Wednesday, as two regional refineries curtailed production while another, the Whiting facility near Chicago – the largest in the Midwest – recovered from an outage caused by a disruption on Sunday to its electrical power.