US gasoline prices to increase to attract European imports: EIA

Washington (Platts)--14Mar2007

Stronger crude oil prices, increased gasoline demand, falling gasoline
imports and both planned and unplanned refinery maintenance have caused
gasoline prices to increase by record levels since mid-January, the US Energy
Information Administration said Monday, adding that the price gains will
likely continue until US prices are high enough to attract "significantly
higher imports."

US regular-grade gasoline prices have risen 39.9 cents/gal to average
$2.559/gal as of Monday, EIA, the statistical arm of the US Energy Department,
said in its This Week in Petroleum report. Retail prices are already 19.3
cents/gal higher than the corresponding week of 2006, and are poised to move
higher in the near term as higher wholesale prices are passed through to the
retail level in the coming weeks, EIA said.

Seasonally higher demand also will contribute to market pressures over
the next few months, as gasoline prices typically increase along with demand
during the spring and summer months and with the shift to gasoline meeting
more stringent summer specifications, EIA added.

Still, retail prices may not surpass last year's record levels for the
first five months of the year, which topped out at $2.92/gal, EIA said.

"[O]nce refineries return from maintenance and imports increase, supplies
appear to be sufficient to keep the national average retail price this spring
below last spring's peak level absent any major unanticipated supply
disruptions," EIA said.

--Cathy Landry, cathy_landry@platts.com