U.S. gasoline inventories lowest since 1967

WASHINGTON Thu Sep 25, 2008 4:31am EDT

Power lines knocked down by Hurricane Ike are seen in front of an oil refinery in Pasadena, Texas, September 15, 2008. REUTERS/Jessica Rinaldi

Power lines knocked down by Hurricane Ike are seen in front of an oil refinery in Pasadena, Texas, September 15, 2008.

Credit: Reuters/Jessica Rinaldi

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WASHINGTON (Reuters) - U.S. gasoline inventories shrunk to the lowest level since 1967 after Hurricanes Gustav and Ike shut Gulf Coast oil refineries, but the Bush administration said there is still no need to ask for emergency fuel supplies from European allies.

The drop in fuel stocks has caused long lines at service stations in southern cities. Retail outlets, including those in Atlanta and Memphis and as far away as Ohio, have run out of fuel.

Nonetheless, U.S. Energy Secretary Sam Bodman said on Wednesday the Bush administration would not reconsider making a request to the International Energy Agency for emergency gasoline supplies. Bodman said last week the Energy Department was "reasonably satisfied" with the recovery of the U.S. oil sector after the hurricanes.

The Paris-based IEA was created by the United States and other industrial nations in the mid-1970s, after the Arab oil embargo, to coordinate energy policy and the release of petroleum stocks when needed.

Five U.S. oil refineries with a total production capacity of 1.231 million barrels a day have remained shut since Ike idled 14 plants, or a quarter of the nation's refined fuel production, nearly two weeks ago, according to the department.

The closed refineries have caused a drawdown in existing fuel inventories to help meet demand.

U.S. gasoline stocks fell 5.9 million barrels last week to just under 179 million barrels, down almost 19 million barrels from a year ago, according department's Energy Information Administration.

That leaves the United States with the lowest fuel stocks since 1967, when America's gasoline demand was just 5 million barrels a day, almost half its current daily consumption of 9 million, the EIA said

Since Gustav struck at the beginning of the month, 52 million barrels of petroleum products have been lost at Gulf Coast refineries, according to Reuters data.

"Continuing reports of spot shortages of gasoline at some retail outlets where supplies have been most disrupted can be expected over the next several weeks," the EIA said in its weekly review of the oil market.

To help ensure adequate supplies and ease pump prices, the Environmental Protection Agency late on Tuesday waived federal clean air requirements for gasoline sold in Atlanta and surrounding counties in Georgia.

Gasoline prices nationwide have dropped as more refineries resumed operations. The EIA said retail gasoline costs may fall to $3.50 per gallon, "if not lower," by the end of the year, as long as there are no further supply disruptions.

(Editing by Walter Bagley)

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