Sign in Subscribe
Petroleum industry

Gasoline Prices Surge After Federal Appeals Court Rejects EPA Ethanol Mandate

Strategic Insights

— 2 min read

The federal appeals court's decision to reject the Environmental Protection Agency's (EPA) mandate requiring refiners to use ethanol in reformulated gasoline (RFG) has sent shockwaves through the gasoline market. With the May gasoline contract on the New York Mercantile Exchange (Nymex) jumping 0.37 cents to close at 65.33 cents/gallon, cash gasoline prices saw significant gains, averaging 63 cents on the Gulf Coast and 63.75 cents-64 cents at New York Harbor. The ruling has been met with relief from the gasoline industry, as refiners will now have the freedom to choose the RFG additive that best fits their needs.

Key Takeaways:

  • The federal appeals court's decision to reject the EPA's ethanol mandate has led to a surge in gasoline prices, with the May contract on Nymex jumping 0.37 cents to close at 65.33 cents/gallon.
  • Cash gasoline prices averaged 63 cents on the Gulf Coast, up 1.5 cents from Thursday, and 63.75 cents-64 cents at New York Harbor, with industry sources reporting problems at Amoco Corp. and Crown Central Petroleum Corp. refineries.
  • The ruling has been met with relief from the gasoline industry, as refiners will now have the freedom to choose the RFG additive that best fits their needs.
  • Analysts predict that prices will stay firm in the short term, with one New York-based trader stating that the decision is "good news for us because it will give us more flexibility in our production."
  • The decision has also impacted crude prices, with the U.S. spot market seeing only a 15-cent/bbl increase to $20.25/bbl over the past week.
  • Natural gas prices on Nymex have seen an increase, with the June natural gas contract settling up 1 cent at $1.662/MMBtu.

Statistics:

  • May gasoline contract on Nymex jumped 0.37 cents to close at 65.33 cents/gallon.
  • June contract settled up 0.41 cents at 63.39 cents.
  • Gasoline prices averaged 63 cents on the Gulf Coast, up 1.5 cents from Thursday.
  • Cash gasoline prices averaged 63.75 cents-64 cents at New York Harbor.
  • U.S. spot market crude prices moved up only 15 cents/bbl to $20.25/bbl over the past week.
  • Dated Brent from the North Sea jumped 60 cents to $19.75.
  • May heating oil contract expired on Nymex at 51.19 cents, down 0.07 cents.
  • June natural gas on Nymex settled up 1 cent at $1.662/MMBtu.

Sources:

  • "Gasoline prices get a boost from federal appeals court ruling" by Bloomberg (no date mentioned)
  • "Court ruling fuels gasoline price surge" by Oil & Gas Journal (no date mentioned)
  • Smith Barney Inc. (Alan H. Levine, analyst)
  • New York-based trader (name not mentioned)
  • Gulf Coast-based refiner (name not mentioned)
  • Louisiana-based products trader (name not mentioned)

Read more