Tags: gas | prices | production | crude oil

Experts: Gasoline Prices Would Be Even Higher Without US Production Gains

By    |   Wednesday, 02 July 2014 01:52 PM

While gasoline prices stand at six-year peaks, they would be even higher if not for increases in U.S. crude oil and refinery output, experts say.

The national average price of regular gasoline stood at $3.67 a gallon Tuesday, up from $3.48 a year earlier, according to AAA's Daily Fuel Gauge Report.

Experts forecast prices will slip 7 cents to 12 cents per gallon by Labor Day, according to CNBC.

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U.S. refining capacity has hit a 33-year high of 17.9 million barrels. "That says to me rather than building new refineries, we've just expanded existing ones to get the economies of scale," Andrew Lipow, president of Lipow Oil Associates, told CNBC.

"In 1981 there were 341 refineries." That number has dropped to 142.

As for U.S. crude oil production, the Energy Information Agency estimates it will average 8.4 million barrels per day this year, up 14 percent from 7.4 million in 2013.

"If we didn't have the domestic shale oil boom, right now the noise from Iraq and the problems with Libya, Sudan, Nigeria [mean] we'd be paying regularly over $4" a gallon, Tom Kloza, an oil analyst with GasBuddy.com, told CNBC.

Oil prices fell early Thursday as the risk of supply disruptions in Iraq continued to recede. Benchmark U.S. crude for August delivery was down 40 cents to $104.08 a barrel early Wednesday in electronic trading on the New York Mercantile Exchange, its sixth day of declines. The contract fell 86 cents to $104.48 on Wednesday, the Associated Press reported.

"Most of the big moves in the market we have seen this year have been on the back of news from Libya," Jens Naervig Pedersen, an analyst at Danske Bank, told Bloomberg. "The market could be starting to focus more on the potential downside risks to the oil price."

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While gasoline prices stand at six-year peaks, they would be even higher if not for increases in U.S. crude oil and refinery output, experts say.
gas, prices, production, crude oil
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2014-52-02
Wednesday, 02 July 2014 01:52 PM
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