Iowa refinery snags may raise gas prices

DES MOINES, Iowa – Refinery snags that left two Iowa storage facilities short of fuel over the weekend are a reminder of how tight the U.S. gasoline market has become and why average prices could soon top $3 a gallon, experts said Tuesday.

While the gasoline supply shortages in Iowa City and Fort Dodge were expected to be resolved by Tuesday night, the incident highlights how small the cushion of available gas supplies is as demand for motor fuels keeps rising just a few weeks before the start of the peak driving season.


Analysts say any further supply disruptions between now and the start of summer will likely cause U.S. pump prices, now around $2.97 a gallon for regular, to jump higher. Retail gasoline prices have climbed nearly 30 cents in the past month, while oil prices are hovering above $64 a barrel.

“We’re in big trouble,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. He noted that inventories stand at 194.2 million barrels