Although plunging oil prices are hitting a six-year low, gasoline prices have not fallen nearly as much.
In the past six weeks, prices of crude oil have dropped around 30 percent, but gasoline in Massachusetts is down only 8 percent. Even with the US producing record amounts of crude oil, the notoriously volatile energy markets can be affected by small events, such as outages at several refineries that have led to tighter supplies of gasoline.
Gas prices in the Midwest, for example, have shot up as much as 30 cents per gallon after a BP plant in Whiting, Ind., this week had to sharply curtail production. And in the Northeast, two major refineries, in New Jersey and Pennsylvania, have reported problems, according to Reuters.
“One refinery can go down, and prices will be higher until it gets back online,” said Brian Youngberg, an analyst at St. Louis-based Edward D. Jones & Co. who focuses on oil companies.
Crude oil closed Friday at $42.13 a barrel; in late June, it was nearly $60 a barrel. Meanwhile, gasoline in Massachusetts averages around $2.52 a gallon, down from $2.74 over the same period. And the difference between what traders pay for crude oil and what consumers pay for gasoline has hit a two-year high.
In January and February, when oil prices ranged between $40 and $50 a barrel, gasoline prices were much lower — bottoming out near $2 a gallon, according to AAA Northeast.
Crude oil prices may continue to remain soft. Demand in China remains weak, for example, while supplies should remain high because of increased production from the United States and such petroleum-exporting countries as Saudi Arabia. And if the pending nuclear deal with Iran leads to that country resuming oil exports, the additional supplies could push prices down even more.
Meanwhile, demand for gasoline has increased 4.1 percent over the past year, so those refineries that can keep supplies coming are also profiting, as Americans buy bigger cars and drive more this summer, said Justin Jenkins, a Houston-based analyst at Raymond James & Associates who follows the industry.
“The demand response we’ve seen from the American consumer has been really strong,” Jenkins said. When gas is cheaper than people are used to, he said, “they don’t decide to spend it all at the mall. Sometimes, they decide to drive more.”
And Rayola Dougher, a senior economic adviser at the American Petroleum Institute, said profit margins at gas stations have grown this summer to about 50 cents a gallon, from roughly 20 cents. Margins in the gasoline supply chain tend to fluctuate frequently, she said.
Still, gasoline prices in Massachusetts are nearly $1 a gallon less than a year ago, said AAA Northeast.
Jack Newsham can be reached at jack.newsham@globe.com. Follow him on Twitter @TheNewsHam.
Clarification: Some companies have benefitted from higher gas prices. Gasoline distributors have also recorded higher profit margins this summer.