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02/23/2021

Weather-Related Refinery Shutdowns Send Gas Prices Skyrocketing

NATIONAL REPORT — Drivers are paying some of the most expensive gas prices than they have in a year because of weather-related refinery shutdowns.

With the forced shutdown of Gulf Coast and some Midwest refineries due to last week's winter weather, gasoline stocks have tightened and gas prices have skyrocketed. On the week, 66 percent of state averages spiked by double digits (10 to 22 cents), driving the national average up by 13 cents to $2.63. That is the most expensive national average since October 2019, AAA reported.

"When close to 40 percent of U.S. crude production is offline because refineries are closed, there is going to be pain at the pump until operations resume," said Jeanette Casselano McGee, AAA spokesperson. "The good news is the nearly two dozen impacted refiners are expected to restart operations this week, if they haven't already. That means regular gasoline deliveries will resume and impacted stations will be re-fueled."

Last week, refinery outages were reported in Texas, Louisiana, Oklahoma, Arkansas, Tennessee and Kansas.

The Energy Information Administration (EIA) reports gasoline stocks sit at 257 million bbl. Just 2 million bbl short of year-ago, stock levels are relatively healthy, which provides ample supply to get to impacted areas, according to AAA.

EIA's latest demand measurement of 8.4 million b/d is the highest reported since early November in 2020, but the association expects that number to be lower as last week's winter storm took motorists off the road.

Gas prices are likely to be volatile until crude production is back to normal levels. Motorists can expect these more expensive prices to stick around, but large spikes are likely to subside.

The nation's top 10 largest weekly increases were seen in Ohio (+22 cents), Arizona (+21 cents), Iowa (+19 cents), Minnesota (+18 cents), Georgia (+18 cents), Michigan (+17 cents), Wisconsin (+16 cents), Nebraska (+16 cents), Indiana (+16 cents) and Maryland (+15 cents).

On the other hand, the nation's top 10 least expensive markets are Mississippi ($2.27), Louisiana ($2.31), Texas ($2.32), Arkansas ($2.35), Alabama ($2.35), Oklahoma ($2.36), Utah ($2.38), Missouri ($2.38), Tennessee ($2.40) and South Carolina ($2.42).