Consumers are hearing one thing but experiencing something quite different — oil prices are falling yet prices at the pump are rising. The increases, in many cases, are being blamed on natural disasters. But the Los Angeles Times says the real reason that gasoline prices are rising is because U.S. refineries are boosting exports.
Concerns about the economy tugged oil prices down despite the fact that Tropical Ttorm Lee caused production shutdowns in the Gulf of Mexico, analysts at Raymond James and Associates reported in the Oil and Gas Journal. West Texas Intermediate and natural gas fell 3 percent and 4 percent, respectively.
Meanwhile, gasoline prices rose for the first time in five weeks in Massachusetts, according to the Sun-Chronicle. Kezi News reported increases in Oregon and the LA Times said gas prices are up in California.
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Rising gas prices are a trend that's being seen across the nation. According to the LA Times, the Energy Department said the average price climbed 4.7 cents a gallon to $3.674 over the last week.
Yet in the Oil and Gas Journal, the analysts at Raymond James and Associates said while U.S. markets were closed Labor Day, investors sold their risky investments — including oil — in the Asian and European markets, registering some of the heaviest equity losses of the year.
The decrease in the cost of crude versus the rise in the prices at the pump may seem baffling. However, Tom Kloza, chief oil analyst for the Oil Price Information Service, provided the LA Times with an explanation.
“For the 10th week in a row, Energy Department numbers show that the country exported considerably more refined products cargoes than were imported,” he said.
Essentially what is happening is that U.S. refineries are selling more products than the nation is importing and American consumers are paying the price because of limited domestic availability.
The United States is now a net exporter, said Kloza. “If not for high prices in the U.S., it would be something to cheer about in terms of helping the deficit. But in the U.S., it's just going to get under people's skin. It's like we're selling off our birthright," he told the LA Times.
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