Summer gasoline prices will be lower in the U.S. than they were last year. But they won’t be much lower, experts say, because U.S. refineries have been exporting record amounts of fuel overseas.
That’s behind what would normally just be a good news story for U.S. drivers.
U.S. production of its own crude oil is booming at such a rate that it is expected to reach 8.2 million barrels a day in 2014 for the first time since 1988, the Energy Department says.
That was back when the first George Bush was elected president. More U.S. oil means less of the pricier foreign crude and lower transportation costs (no need to rent supertankers and cross oceans.)
But the great oil news also included an updated prediction on the gasoline prices Americans will see this summer. There the news was positive, but not great.
“The average gasoline price is now expected to be $3.53 a gallon, 16 cents less than last summer and significantly lower than the $3.78-per-gallon peak reached in late February,” said Adam Sieminski, administrator for the U.S. Energy Information Administration.
But why not much lower gasoline prices, especially when oil consumption in the U.S. is also down 9% from the peak seen in 2005?
Blame those exports. That would be the diesel and gasoline that U.S. refiners are exporting to places like Central and South America, including Venezuela, and other parts of the world.
“The grand themes we’re hearing about: The higher U.S. oil production and lower U.S. demand are being canceled out by exports,” said Tom Kloza, chief oil analyst for the Oil Price Information Service.
“It’s a great time to be a U.S. export refinery,” Kloza added.
So far in 2013, U.S. refiners have set a new record in the amount of refined products, like diesel and gasoline, that they have sold to customers overseas.
The export figure has been as high as 3.24 million barrels a day, according to Energy Department statistics. That’s three times higher than five years ago.