Nearly two million barrels of oil chugged through NuStar’s pipelines every day in the third quarter, the San Antonio-based petroleum and pipeline company reported in its earnings for that period.

But as oil production ramps up, it continues to be outpaced by demand, which is rising past pre-pandemic levels and causing big price increases at the pump.

Drivers in San Antonio paid $2.94 per gallon of gasoline on average, AAA reported last week. That figure is less than almost every city in Texas except Amarillo, where gas is 4 cents less on average, but still up $1.74 from the same week last year.

Much of that increase comes from new demand, as shown by earnings reports released last week from NuStar and Valero.

NuStar’s quarterly earnings release said demand for its refined product is up 105% over pre-pandemic levels, and that it expects demand to outperform pre-pandemic levels through the rest of the year.

The company reported that — adjusting for the sale of terminal assets and gains from insurance proceeds — it posted profits of $55 million, or $0.16 per share for the third quarter ending Sept. 30. Last year for the third quarter, it posted an adjusted net income of $45 million, or $0.08 per share.

Painting a similar picture, Valero, the world’s largest independent petroleum producer, told analysts in a call late last month that demand is over 95% of 2019 levels, and that fuel supplies are at five-year lows.

According to the petroleum giant’s third-quarter earnings report, an increase in gasoline margins boosted Valero revenue by approximately $1.1 billion.

Valero reported late last month that it made $463 million, or $1.13 cents per share, in the third quarter. Last year it posted a net loss of $464 million, or $1.14 per share.

If futures for oil are any indication, prices at the pump could continue to increase. And the on-going pandemic still presents a wild card.

“The broader implications of the pandemic on our results of operations and financial position remain uncertain and may continue to be significant,” Valero said in its report.

Waylon Cunningham

Waylon Cunningham writes about business and technology. Contact him at waylon@sareport.org.