A refinery fire in Texas and some distribution snags in the Pacific Northwest are putting upward pressure on pump prices as 2022 begins. For the week, the national average for regular edges up half a cent to $3.29 a gallon. The Oregon average shoots up six cents to $3.83. This is the largest weekly jump in the nation.
A pre-Christmas fire at the Exxon Mobil Corp plant in Baytown, Texas, is causing reduced output. Recent reporting, however, indicates the damage was to a non-refining section of the complex. The plant is the nation’s fourth-biggest oil refinery, with the capacity to process 560,500 barrels per day of crude.
Here in the Pacific Northwest, some issues at terminals in the Portland area as well as winter weather shutting down mountain passes have created tight supplies, causing retail pump prices to rise.
“In addition to the refinery and terminal issues, the Omicron variant is also influencing oil and fuel prices, as fears of the economic impact create uncertainty,” says Marie Dodds, public affairs director for AAA Oregon/Idaho. “Investors worry that the surge in COVID-19 cases due to the Omicron variant will lead to reduced future global oil consumption.”
Crude oil dropped to $68 per barrel on Dec. 20, then climbed above $75 per barrel on Dec. 27 and has remained above that benchmark since then. Crude oil prices tumbled in late November from $84 per barrel to below $70 per barrel, due to fears of a global shutdown and decreased demand for oil caused by news of the Omicron variant.
U.S. gasoline demand increased from 8.99 million b/d to 9.72 million b/d. Total domestic gasoline stocks decreased slightly by 1.5 million bbl to 222.7 million bbl last week, according to the U.S. Energy Information Administration (EIA). Growing demand and tight supply would support more significant increases in pump prices, but fluctuations in the price of crude oil have helped to limit price increases. If oil prices climb, pump prices will likely follow suit.