Last week, total domestic crude inventories took a surprisingly large draw of 12.8 million bbl, according to new data from the Energy Information Administration. At 469.6 million bbl, crude inventories are almost 53 million bbl higher this year, but the dramatic decline last week increased domestic crude oil prices by $1.55 to $59.38/bbl yesterday. If higher crude prices are sustained, motorists are likely to see higher pump prices later on this summer.
In related news, after last week’s massive fire at Philadelphia Energy Solution’s refinery in South Philadelphia, the refiner announced that it will permanently shut down the refinery next month. It is the oldest and largest refinery on the East Coast, producing 335,000 barrels of crude per day (42 U.S. gallons per barrel). The closure will likely bring increased pump prices to states in the region, as gasoline from Canada and Europe, neighboring refineries, and the Colonial Pipeline will incur increased transportation costs to meet demand. Motorists in the region will likely continue to see modest increases in pump prices until supply is stabilized – especially leading up to what is expected to be a high-demand travel period for the Fourth of July (41.1 million Americans to travel by automobile).
Since Monday, the national average has increased three cents to $2.69.