|The US average price of gas hit $3.037 yesterday. But, prices in San Francisco are among the nation's highest. (Noah Berger/Bloomberg News)|
Summer gas supply concerns are driving up energy prices
NEW YORK -- With gasoline prices poised to break rec ords at the pump, energy futures prices jumped yesterday as traders noticed a gas supply imbalance in the fine print of Wednesday's government inventory report.
Though the Energy Information Administration reported that gasoline stocks rose an average of 400,000 barrels last week, the first increase in 13 weeks, a closer inspection shows much of that increase is due to a 1.1-million barrel increase in inventories on the West Coast, said Kevin Saville, an analyst at Platts Oilgram News.
"When you back out that 1.1 million build, you really get a draw [or reduction in inventories] of 700,000 barrels in the rest of the country," Saville said.
The West Coast is relatively isolated from the rest of the country, meaning an increase in gasoline inventories there doesn't do the rest of the nation much good.
The national average price of gas at the pump rose to $3.037 yesterday, up 0.3 cent overnight, according to AAA and the Oil Price Information Service. Gasoline futures for June delivery jumped 9.52 cents to settle at $2.3261 a gallon on the New York Mercantile Exchange.
Light, sweet crude for June delivery rose 26 cents to settle at $61.81 a barrel on the Nymex. Also on the Nymex, heating oil futures gained 4.67 cents to settle at $1.8625 per gallon while natural gas prices rose less than a penny to settle at $7.726 per 1,000 cubic feet.
Unplanned outages and scheduled maintenance at refineries, sluggish imports, and strong demand have plagued gasoline stocks since early February.