US retail gasoline prices soar

Retail gasoline prices in the United States rose on Tuesday and hit another all-time record, surpassing one set in March, as global refineries grappled with a bottleneck that has sent prices soaring ahead of driving season.

The average cost of a retail gallon of gasoline hit $4.374 early Tuesday, according to the American Automobile Association, surpassing the former record of $4.331.

Since March 30, Brent crude futures have lost 7 per cent, but gasoline futures are up 9.4 per cent, and hit a record on Friday of $3.7590 per gallon before selling off on Monday.

Refinery closures due to both scheduled maintenance and unplanned upsets have boosted fuel prices even as the United States and other nations have taken steps to boost worldwide crude supply.

Global fuel stockpiles are dwindling as demand has rebounded to pre-pandemic levels. Supplies tightened further following the invasion of Ukraine and subsequent sanctions on Russia from the United States and allies.

The world has lost 1 million barrels of refining capacity and 1.5 million barrels of oil supply since the pandemic, estimated Mike Jennings, chief executive officer at HF Sinclair Corp in an earnings call on Monday.

"That's 2.5 per cent of world consumption...it's a big number," said Jennings.

In the spring, refiners prioritize gasoline output ahead of warmer weather when driving picks up. But in recent weeks, they have increased distillate output to meet jet fuel and diesel demand in Europe, Latin America and the United States, as Western sanctions on Moscow curtailed Russia's exports.