Retail Gasoline Proves Volatile Post-Fern

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land Texas)

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Summary

Retail gasoline prices were under pressure from the demand surge that came ahead of Winter Storm Fern. Volatility is likely at the pump given the outlook for lingering cold across North America.

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Gasoline Markets Impacted by Winter Weather

Friday saw another bout of cold-winter air ahead of the next round of severe weather, but while refineries are returning to normal operations, consumers are still seeing some volatility at the pump, data show.

Travel club AAA put the average retail price for Friday at $2.87 for a gallon of regular unleaded gasoline. There's a distinct mismatch, however, between many southern states and those in the Northeast.

"Below-freezing temperatures and lingering snow have disrupted some crude production and refinery operations, while gasoline demand increased pre-storm as drivers filled up their tanks ahead of the severe winter weather," AAA said.

In those areas most impacted by the storm, it was states such as Pennsylvania and New York that had the highest retail prices, with New York flirting with $3.00 per gallon. Drivers in Mississippi, which saw widespread power outages, were paying closer to $2.40 per gallon.

The southern United States, however, was likely buffered by the dense network of refineries in the region. Before the storm, the total amount of refined petroleum products supplied to the market, a proxy for demand, was 0.1% below year-ago levels, the federal government reported. Last week showed gasoline demand jump 11% from prior-week levels to average 8.75 million barrels per day (BBL/d). Supplies, meanwhile, remained more or less stable.

Despite the frigid cold, IIR Energy showed few long-term issues with the nation's refineries. In the Great Lakes region, Cenovus Energy had curtailed operations at its refinery in Lima, Ohio, knocking out close to 172,000 BBL/d in throughput. By Thursday, refinery operations started to return to normal, but with the lingering cold weather, it could be Monday before a full restart. Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Plant Database can click here for the plant profile.

In the south, Marathon Petroleum was forced to idle some units at its 550,000 BBL/d-refinery on Galveston Bay, Texas, because of the early-week winter storm. Restart efforts began on Wednesday. Click here to see the plant profile.

IIR Energy was able to identify slightly more than 30 refineries that were within areas impacted most by the storm, accounting for a total processing capacity of 4.6 million BBL/d. Meanwhile, there's not much relief in sight for the region in terms of weather. Winter-weather advisories were in place on Friday from southern Texas all the way up to Maine. A freeze watch was in place for the Houston area during the weekend, another cold snap that could impact refineries by next week.

While the weather isn't necessarily cooperating, market dynamics may be in the consumer's favor. Even with the weather impact, retail gasoline prices are still below year-ago levels of $3.10 per gallon.

And an oversupplied market, which could be impacted further should Venezuelan oil show up on the market, is leading to lower crude oil prices, which accounts for the bulk of what consumers see at the pump. The federal government is expecting retail gasoline prices to average $2.90 per gallon this year, some 20 cents below year-ago levels.

By the Numbers

• $2.90 per gallon the expected average for 2026
• 11% week-on-week increase in gasoline demand
• 30+ refineries in the path of Winter Storm Fern

Key Takeaways

• Refineries return online, but gasoline markets still volatile
• Despite outages, southern retail markets are cheap
• Lingering cold expected

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).