* AAA data showed average US gasoline prices rose 6 cents
this week to $3.88 a gallon Friday
* Refinery outages in Russia and the United States are
squeezing fuel supplies
* EIA data showed US petroleum products exports hit a weekly
record 8.7 million bpd
By Nicole Jao
NEW YORK, July 10 (Reuters) - U.S. drivers have seen
gasoline prices climb again after weeks of steady declines, as
renewed fighting between the U.S. and Iran lifted crudeoilprices
to their biggest weekly rise in eight weeks.
Disruptions in the global refining system and robust U.S. fuel
exports further tightened supplies, and average pump prices rose
6 cents this week to $3.88 a gallon on Friday, AAA data showed.
It was the biggest weekly increase since mid-May.
Renewed fighting between the U.S. and Iran over the Strait of
Hormuz sent energy prices back up sharply this week. With the
U.S. summer driving season in full swing, stubbornly high
gasoline prices have emerged as a political flashpoint for
President Donald Trump, whose Republican Party is campaigning to
hold thin majorities in the U.S. Congress in November midterm
elections.
Trump recently accused oil companies of price gouging.
"Gasoline prices have rallied alongside the massive move
higher in crude oil after several tankers in the Strait of
Hormuz were attacked," Alex Hodes, director of energy market
strategy at brokerage StoneX, said.
Global oil futures benchmark Brent was on track for a
weekly gain of roughly 5.5% after attacks on several tankers
transiting the Strait of Hormuz. This was followed by
tit-for-tat strikes between the U.S. and Iran and Washington's
decision to revoke a general license permitting the sale of
Iranian oil.
Oil flows through the Strait of Hormuz remain well below
pre-conflict levels, stoking fears that even minor disruptions
could ripple through global fuel markets. The key
waterway carried about 20% of daily global oil and gas supplies
before the start of the war on February 28.
Trump has pressed gasoline retailers to cut prices more
aggressively. The administration has urged the U.S. Justice
Department to investigate possible gasoline price gouging and
recently introduced a new price-cutting initiative offering
discounted gasoline at some locations in Pennsylvania and New
Jersey.
TIGHTENING SUPPLY
Crude supply concerns are only part of the story, Hodes added,
pointing to unplanned refinery outages in both Russia and the
U.S. that have squeezed fuel supplies.
Russia's refining sector has been disrupted asrepeated attacks
reduced fuel production and worsened shortages. Moscow has
curbed diesel exports and boosted gasoline imports, tightening
global fuel supplies and lifting prices.
Russian output of gasoline, diesel, jet fuel and fuel oil has
been decimated with many months of downtime ahead, said Tom
Kloza, chief energy adviser at Gulf Oil.
In the U.S., refinery outages have further strained supplies,
including disruptions at Marathon Petroleum's ( MPC )
146,000-barrel-per-day refinery in Detroit, Michigan, and
Delta's 190,000-barrel-per-day refinery in Trainer,
Pennsylvania.
U.S. gasoline inventories fell by 1.9 million barrels last week
to 212.1 million barrels, the Energy Information Administration
said on Wednesday, leaving stockpiles nearly 10 million barrels
below the five-year average.
Gasoline stocks are running below seasonal norms across all
U.S. regions, but the shortfall is especially pronounced on the
Gulf Coast, said Denton Cinquegrana, chief oil analyst at Dow
Jones Energy.
Inventories in the U.S. Gulf Coast, which produces the vast
majority of the nation's supply of refined products, fell to
76.4 million barrels last week, below the five-year average of
82.3 million barrels.
Moreover, the loss of Middle Eastern and Russian barrels
from the global market has allowed refiners in the U.S. to reap
stronger margins as the swing suppliers of fuel.
U.S. petroleum products exports hit a weekly record of 8.7
million bpd in the week to July 3, EIA data showed.
"The U.S. Gulf of Mexico may see consistent gasoline exports
of 1-million b/d and there are bets among Houston traders as to
whether 2-million b/d will be achieved for distillate
departures," Kloza wrote to clients on Thursday.
The U.S. summer driving season from June through early September
typically boosts gasoline consumption, while production of more
expensive summer-blend fuel raises refining costs, boosting pump
prices.
"It seems prices will mostly drift up and down here in the
short-term," Cinquegrana said.