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Gas supplies seen OK through Labor Day

U.S. gasoline supplies should be adequate to meet demand through the Labor Day holiday, but drivers will continue to face record pump prices, a government energy analyst said Tuesday.
/ Source: Reuters

U.S. gasoline supplies should be adequate to meet demand through the Labor Day holiday in early September, but drivers will face more record pump prices, a senior government energy analyst said Tuesday.

The national retail price for regular unleaded gasoline hit a record high of $2.37 a gallon on Monday. However, Doug MacIntyre, senior analyst at the Energy Information Administration, said the EIA calculates gasoline spot prices have jumped 20 cents a gallon in less than two weeks and not all those costs have been passed on to consumers.

“That’s just starting to be felt at the pump,” MacIntyre told Reuters. “We know there’s likely to be more price increases before they start coming down.”

He said gasoline prices are up because of strong demand, rising crude oil costs that topped a record $64 a barrel on Tuesday and recent shutdowns at several big refineries, resulting in a drawdown in gasoline inventories.

U.S. refining capacity is tight and it “can’t handle any glitches in the system,” MacIntyre said.

He pointed out that gasoline inventories have fallen from the upper end of the 5-year average range to the lower half and are “heading down.”

“We probably are OK (with gasoline supplies) to get to Labor Day, but the question is how much is demand going to fall off (after the holiday) and what’s crude going to do and how does that impact the gasoline price,” MacIntyre said.