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Commodities Corner: Why have gas prices in the Northeast jumped in the past week?

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The bad news is that gasoline prices have spiked in the U.S. Northeast in the past week. The good news is that prices probably won’t climb for long — and the nation, on average, is seeing declines in the fuel’s prices at the pump.

The East Coast is “very challenging right now,” said Patrick DeHaan, head of petroleum analysis at fuel-price tracker GasBuddy. Specifically, PADD 1A, which refers to the New England region, is seeing low distillate and gasoline imports, he said. The New England region includes Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.

There’s “just not enough product and that’s sending prices higher” for both gasoline and diesel, DeHaan told MarketWatch.

The national average for regular unleaded gas stood at $3.794 a gallon Friday morning , according to GasBuddy. That unchanged from Thursday and a month ago, and down 10 cents a gallon from a week ago, but still up 40 cents from a year ago.

National average regular unleaded gas prices vs. Connecticut and New York

GasBuddy

Prices in Connecticut, Maine and Massachusetts, meanwhile, have each seen prices climb by nearly 4% in the past week, with average prices in Connecticut at $3.563 a gallon on Friday, up from $3.435 on Oct. 21, GasBuddy data show. Also on the East Coast, prices in New York increased by 2% from a week ago to $3.698 Friday.

New York Harbor saw wholesale gasoline prices spike this week, with the cash numbers moving about 30 cents a gallon over futures prices
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-3.91%

RBX22,
-7.32%
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Tom Kloza, global head of energy analysis at the Oil Price Information Service, a Dow Jones company. “That brought up all the terminal prices in the Northeast.”

All of the refineries here are now performing “normally” and Canada’s key Irving Oil refinery, in Saint John, New Brunswick, “should be contributing gasoline to the region by Nov. 10 or so,” said Kloza.

Meanwhile, PBF Energy
PBF,
+0.54%

has restarted several units at its Paulsboro, New Jersey refinery that had been idled during the pandemic, in a move to support low Atlantic coast distillate inventories, Argus Media reported on Thursday.

The PBF refinery “coming online might help, but it’s a pretty small refinery,” with output of around 105,000 barrels per day, said DeHaan.

“All in all, market is still very tight — nowhere more than the Northeast, said DeHaan.

President Joe Biden’s Oct. 19 announcement for the release of more crude oil from the nation’s Strategic Petroleum Reserve, as part of the historic drawdown of 180 million barrels announced in the spring, was expected to have little or not impact on retail gasoline prices.

Still, drivers in the Northeast may find some comfort knowing that they pay much less than average California price of $5.567 a gallon, though prices for that state have declined by just over 3% in the last week, according to GasBuddy data.

Kloza also believes the spike in gas prices in the Northeast won’t last.

The higher prices came as the result of the “culmination of a number of factors,” said Kloza. Those include reasonably decent demand, few imports of gasoline because of an October strike in France, previous maintenance at Monroe Energy refinery in Trainer, Penn., and a risky market, which has Gulf Coast suppliers sending a bit less gas to the Northeast than normal, he said.

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