NEW YORK (MainStreet) Gasoline prices have recovered from the frigid weather brought on by the polar vortex -- mitigated by a decrease in demand and coupled with temporary refinery outages.
Prices at gas pumps across the country began to ease with temperatures returning to their norms on Thursday across the Northeast.
Seven refineries experienced outages across the U.S. and Canada, ranging from Detroit to Tennessee, spiking prices higher as production was temporarily halted since large declines in temperature can result in liquids freezing or diesel fuel gelling. Wholesale gasoline prices skyrocketed by as much as 7 cents per gallon in the Midwest as refiners were faced with temporary outages caused by the freezing temperatures. Both Marathon Petroleum Corp.'s Detroit refinery and Valero Energy Corp.'s Memphis refinery reported temporary setbacks due to the frigid temperatures.
Gasoline prices are now returning to the normal prices that began in January before the freeze, said Ryan Mossman, vice president and general manager of fuel services of Fuelquest, a Houston-based software company that manages supply chain for suppliers and purchasers of fuel. Although prices rose temporarily, demand for gasoline was much lower because of the temperature even though the refineries experienced production issues, which normally result in prices spiking.
"We have had a couple of temporary price spikes this week due to the refinery outages, but those outages aren't enough to compensate for the drop in gasoline demand we have seen this month," he said.
Gasbuddy.com found that gas rose above $3 a gallon in nearly all states, except for Montana where gasoline prices were $2.98 a gallon. The average price in the U.S. was $3.29 a gallon with the highest gas in Hawaii at $3.98.
Regular gasoline retail prices increased moderately to reach an average of $3.28 per gallon during December, the Energy Information Administration said. The annual average regular gasoline retail price, which was $3.51/gal in 2013, is expected to fall to $3.46/gal in 2014 and $3.39/gal in 2015.