By Brian L. Milne, Refined Fuels Editor for DTN
Retail gasoline prices across the country have surged to 2009 highs in May, as wholesale markets gear up for the busy summer driving season which typically kicks off in earnest during the Memorial Day holiday.
Drivers in metropolitan regions across the United States should expect the upward trend in retail prices to continue into June, however, the pace of those increases will vary depending on local supply conditions.
In the Chicago metropolitan region, after a sharp move higher, the advance in retail prices should slow. A glitch on a major pipeline serving Chicago and neighboring market had pushed wholesale prices in the Windy City sharply higher but, with the pipeline returning to normal operations, prices in the wholesale markets have since eased.
Retail gasoline prices are also sharply higher in California and Phoenix, Arizona. Production cuts in producing gasoline at refineries in California, which supply consumers with gasoline both in the state and in neighboring regions like Phoenix, have worked to push wholesale and, in turn, retail prices higher for those markets.
The lower output rate has triggered a draw down in inventory, which is 17% lower now than during the same timeframe in 2008.
About the Author
Brian L. Milne is the Refined Fuels Editor for DTN-a leading business-to-business provider of real-time commodity information services. Milne has been focused on the energy industry for nearly 14 years as an analyst, journalist and editor. He can be reached at [email protected].