The escalation in wholesale prices of gasoline, furnace oil and diesel continued over the past two-week period with the average NYMEX recorded wholesale price of gasoline increasing 3.3 cpl, furnace oil 3.3 cpl and diesel 3.1 cpl.

As usual a variety of factors have combined to contribute to this situation. Firstly, the price of Brent crude over the past 60 days has risen in excess of 3%, while WTI prices have dropped significantly over this same period. Middle East geopolitical issues and reduced production from Libya, IRAQ and the North Sea have exerted upward pressures on Brent market prices. Indeed, the gap between WTI and Brent crude, which on October 1 was calculated at $5.90 per barrel, has now grown to in excess of $19.00 per barrel.

Reduced refining capacity along the North American Atlantic coast resulting from seasonal maintenance and winter product changeover, combined with an increase in consumer demand due to improved US economic conditions, has served to pressure inventory reserves creating further upward pressures on the wholesale prices of gasoline.

Continued growth in the export of diesel and furnace oil to Europe, Asia and South America along with increased domestic demand has similarly impacted distillate pricing.

It is anticipated that the return to normal production capacity of regional refineries will assist the restoration of normal inventory levels, thus offering some degree of wholesale price moderation.