The big runup in gasoline prices that has hammered Midwestern motorists appears to finally be taking a breather.
Gas in the the Kansas City area has climbed 60 cents a gallon in the last month, averaging $3.80 on the Missouri side and a few cents higher on the Kansas side. That’s bad news for area drivers, and it was even worse in some other parts of the Midwest. In Minneapolis, for instance, gas prices set a record Friday at $4.22, according to AAA.
The regional spike — gas prices in other parts of the country are about the same as a month ago — is being attributed to lower than normal gas stockpiles, refinery outages and a glitch in a pipeline serving the region.
But wholesale gas prices in the Midwest actually declined Friday, raising hopes that the runup is running out of steam.
“I think we’ve seen the worst,” said Steve Mosby, a partner in Admo Energy, a Kansas City company that buys fuel for retail stations to resell.
Wholesale gas prices affecting most of the Midwest fell about 13 cents per gallon Friday, with most of that decline expected to reach wholesale terminals by the evening, including in the Kansas City area.
“I think relief is coming,” said F.J. Cronenwett, a wholesale manager with Robson Oil, which serves the Kansas City area.
How quickly the decline will reach retail pumps is unclear.
The price spike shows that even with overall ample supplies of fuel in the U.S., there can still be parts of the country where supplies tighten and prices rise.
Gas stockpiles were already below normal when the situation was made worse by unplanned refinery outages, including one still going on in El Dorado, Kan. The Midwest by the end of last week had the lowest percentage of refinery capacity being used in the country.
As James Williams, an energy economist with WTRG Economics, put it, the Midwest had “a combination of not having enough and not making enough.”
The problem deepened a week ago when the Explorer pipeline, which was transporting gas to the Midwest from refineries along the Gulf of Mexico, had a pump problem and other glitches that slowed deliveries. That had some wholesale suppliers with contracts to provide fuel to their customers bidding up the price of the fuel still available.
A report Friday that the Explorer tie-up was easing was credited by some analysts for part of the drop in wholesale prices.
The question now is whether that price drop and any additional relief will lower retail fuel prices by Memorial Day weekend, the traditional start of the summer vacation season. Retail gas prices in the Kansas City area are 40 cents a gallon higher than a year ago.
“Hopefully the increase will be of short duration,” said Mike Right, a spokesman for AAA.
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