(Bloomberg) -- American consumers are paying more at the gasoline pump, and that trend looks likely to continue as futures rally.
New York gasoline futures traded as high as $2.37 a gallon on Monday and are hovering near the highest in more than three months. The increase has come amid unexpected refinery outages alongside lingering impacts of a winter freeze, which have hindered production of the motor fuel. That has helped push up pump prices, with the national average just shy of $3.20 a gallon, according to data from the American Automobile Association. That compares with about $3.07 a gallon two months ago, the cheapest since 2021.
Recent shutdowns at large refineries, including BP Plc’s facility in Whiting, Indiana and a Phillips 66 unit in Ponca City, Oklahoma, have exacerbated seasonal maintenance. A cold front in late January also curbed output from West Texas to North Dakota, contributing to a drop in refinery utilization rates to 82.4%, the lowest since December 2022. Rising oil prices have also played a part, with attacks on merchant ships carrying crude in the Red Sea making it more expensive to transport the commodity.
The low refining utilization rate in the Energy Information Administration’s weekly reports shows this is “not completely a seasonal maintenance issue,” said John Kilduff, founding partner of Again Capital LLC, in a phone interview. “It’s because of the slow rebound from the storms.”
Continued upward momentum for gasoline prices would be a blow to consumers and pose a risk to President Joe Biden, whose reelection bid partly hinges on stifling inflation. Still, even after the recent advance, futures prices are below their seasonal levels for the past two years.
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