(Bloomberg) -- The spate of refinery outages along the U.S. Gulf Coast because of freezing weather is raising the specter of gasoline at the pump reaching $3 a gallon for the first time since 2014.
So far, the national retail average was just under $2.52 a gallon Tuesday. But the energy crisis triggered by the polar blast has shown no signs of abating, and Gulf refineries could take weeks to get back online even after power is restored and pipes unfreeze.
Rolling power cuts are being implemented from North Dakota to Texas for the second consecutive day to prevent the collapse of networks and limit demand. The deep freeze is forecast to remain until Wednesday at least. The disruptions could help build momentum for gasoline price increases that typically continue into the driving season starting in May.
“In terms of $3 a gallon, this simply provides more momentum for us to get there,” Patrick DeHaan, head of petroleum analysis for retail gasoline tracker GasBuddy, said of the winter emergency. “The average rise in the national average from late winter to Memorial Day has been 25 to 65 cents a gallon, which could mean we’re right on the doorstep.”
Price rises linked to tighter supply will be tempered somewhat by less driving during the storms and the ongoing pandemic, he said.
Gasoline will be supported by higher rack prices in New York and the cash trade in Houston. The Gulf Coast refining hub that’s undergoing widespread power failures supplies the East Coast and Midwest via pipeline.
The national average price for gasoline last consistently topped $3 a gallon in 2014, according to data from auto club AAA.
©2021 Bloomberg L.P.
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