U.S. pump prices seen surging as refinery outages cut supply ahead of summer

Crude oil closed with slight losses Friday a day after jumping to four-month highs, but prices still posted a ~4% gain for the week, helped by larger than expected drops in U.S. inventories for crude and gasoline, and a stronger demand forecast from the International Energy Agency.

Continued plans for production cuts from OPEC and its allies as well as Ukrainian drone attacks on Russian energy facilities also supported crude prices this week.

Front-month Nymex crude (CL1:COM) for April delivery fell 0.2% on Friday but ended +3.8% for the week at $81.04/bbl, and front-month May Brent crude (CO1:COM) closed down 0.1% on Friday but +3.9% for the week to $85.34/bbl, with both benchmarks ending the week at their second highest settlement values YTD.

Rising demand from U.S. refiners completing planned overhauls boosted front-month Nymex RBOB gasoline +7.6% on the week to $2.72/gal, its best settlement since September 14.

U.S. natural gas (NG1:COM) posted its sixth weekly loss out of seven, with front-month April Nymex gas down 4.9% on Friday and -8.3% on the week at $1.655/MMbtu.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)

Analysts say U.S. motorists should brace for gasoline prices to turn sharply higher in the coming weeks, with the national average price at the pump rising more than 9% YTD to ~$3.40/gal since March 8, the highest since early November, AAA reported.

U.S. gasoline stockpiles fell by 5.7M barrels to 234.1M barrels in the week to March 8, government sata showed this week, and are now trailing their five-year seasonal average by more than 2%.

Total U.S. refinery utilization rates have remained below 87% for eight straight weeks, the longest such stretch in three years, and research firm IIR Energy calculates that ~1.2M bbl/day of the 18M bbl/day in U.S. capacity are offline this week, and forecasts 885K bbl/day will be down next week.

The oil and gas stock sector, as represented by the Energy Select Sector SPDR ETF (XLE), ended the week +3.8%.

Top 10 gainers in energy and natural resources in the past 5 days: Nuscale Power (SMR) +43%, Vaalco Energy (EGY) +29.1%, FutureFuel (FF) +24.5%, Lithium Americas (LAC) +21.6%, Silvercrest Metals (SILV) +20.6%, Southern Copper (SCCO) +19.4%, Endeavour Silver (EXK) +18%, Amplify Energy (AMPY) +17.1%, Contango Ore (CTGO) +15.6%, Ero Copper (ERO) +15.2%.

Top 5 decliners in energy and natural resources in the past 5 days: Altus Power (AMPS) -30.9%, Verde Clean Fuels (VGAS) -23.6%, Hallador Energy (HNRG) -22%, Ramaco Resources (METC) -18.6%, Alpha Metallurgical Resources (AMR) -18%.

Source: Barchart.com