U.S. 2021 average gasoline price topped $3/gal., highest since 2014; U.S. December auto sales at slowest pace since May 2020; U.S. construction spending sees 9% on-year expansion in November

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U.S. 2021 average gasoline price surpassed $3/gal., highest since 2014

Gasoline prices increased to an average of $3.01 per gallon in 2021 which was the highest nominal price in seven years, the U.S. Energy Information Administration said on Jan 5.

The average U.S. retail gasoline price was $2.25/gal at the start of 2021. It first topped $3 per gallon on May 17 after disruptions to the Colonial pipeline operations.

A cyberattack temporarily halted movement of the Colonial Pipeline, a 2.5-million-barrel-per-day system of 5,500 miles of pipelines from Houston, Texas, to Linden, New Jersey.  The Colonial pipeline moves diesel, gasoline, heating oil, and jet fuel and serves the Southeastern U.S. through pipelines and barge connections.

The U.S. average retail gasoline price continued to increase into the second half of the year peaking at $3.41/gal on Nov. 8 before finishing the year at $3.28/gal, or $1.03/gal more than at the start of the year, according to the EIA.

The 2021 average retail price for regular grade gasoline varied from a low of $2.67/gal on the Gulf Coast to a high of $3.70/gal on the West Coast.

U.S. gasoline consumption averaged 8.8 million barrels per day in 2021. Consumption during the fourth quarter of 2021 was only 0.2 million barrels per day less than in the fourth quarter of 2019.

U.S. gasoline production didn´t increase as much as consumption and this led to about 26 million barrels of gasoline inventory withdrawals in 2021, according to the EIA. 

Supply didn´t catch up with demand mainly because of refinery closures during the pandemic, according to industry participants.

Dec. 2021 U.S. auto sales see slowest pace since May 2020

The December pace of U.S. auto sales, known as the seasonally adjusted annual rate, is expected to finish near 11.4 million units, or down about 30% from a year earlier, according to data released by Cox Automotive, a consulting company serving auto dealerships. 

“December 2021 will be the slowest pace since May 2020, when the country remained mostly closed during the first wave of the COVID pandemic,” Cox said in a Dec. 29 statement.

The contraction is significant also compared with previous years. The industry had recorded a five-year average of 17.3 million new vehicles sold annually during 2015-2019.

The supply of new vehicles may begin to improve in the first quarter with the second half of the year likely seeing a more robust market.

December 2021 was the slowest month since May 2020, Cox said. December sales of new vehicles may reach 1.1 million units, a 32% on-year decline.

About 15 million vehicles were sold in 2021, a 3.5% increase from 2020, according to Cox.

The supply of new vehicles will begin to improve in the first quarter with the second half of the year likely seeing a more robust market, it added.

“It will take time to restock the shelves at dealerships,” said Cox Automotive Senior Economist Charlie Chesbrough, according to information released in late December and updated on Jan. 4.

During much of 2021 prices of new vehicles reached new record levels just about every month mainly due to a shortage of new vehicles to sell that resulted from supply problems attributed to the Covid-19 pandemic.

Auto sales in the first half of 2021 added to nearly 8.4 million units, “a strong pace that left the industry unable to refill the pipeline” while sales in the second half of 2021 may end closer to 6.6 million units once final annual numbers are calculated, Cox said.

Multiple petrochemicals have applications in automotive.

U.S. construction spending sees 9% on-year rise in November

U.S. construction spending during November was estimated at a seasonally adjusted annual rate of nearly $1.6 billion, 9.3% more than in the same month a year earlier.

Construction spending during the first eleven months of this year was about 8% more than in the same period in the previous year, the U.S. Census Bureau Data said on Jan. 3.

Construction is a key driver for multiple petrochemical products including PVC for tubing as well as multiple fixtures, and EPS for insulation.

By Reuters Events Downstream