LI gas prices drop below $4, but world events could push them back up
Regular gasoline has slipped below $4 a gallon on Long Island again amid lower crude oil prices, but some experts fear it could head back up if Wednesday night's invasion of Gaza by Israel and Thursday's crash of a Malaysia Airlines jetliner in Ukraine further stir world tensions and boost crude oil futures.
The AAA, a motorist group, said regular gas averaged $3.969 Thursday in Nassau and Suffolk. The average had tipped over $4 on June 21 for the first time since last summer. It peaked at $4.036 on July 2 before beginning to slide. The new average is 1.8 cents higher than a year earlier.
"We've seen a little bit of a dip in prices," said Tariq Zahir, a Manhattan-based commodity fund manager at Tyche Capital Advisors LLC in Laurel Hollow. "For now at least, we won't see prices go down any more, and I wouldn't be surprised if by the weekend they go up again."
The price swings come at the height of summer vacation season, when demand typically is the year's strongest.
However, analyst Tom Finlon, director of Energy Analytics Group Ltd. in Jupiter, Florida, a trade adviser to an energy hedge fund, said that gasoline supplies appear adequate for the summer. "If gasoline prices go up now, they won't go up that much," he said.
From a recent high of $107.73 a barrel on June 20 on fears that civil unrest in Iraq would curtail that nation's crude oil output, crude prices had been receding. But on Wednesday, the federal government reported a drawdown of crude oil stocks as refineries ran flat out to produce gasoline.
And Thursday, international events sent U.S. benchmark grade crude up by $1.99 to settle at $103.19 a barrel on the New York Mercantile Exchange. Bloomberg News said it was the biggest gain since June 12 and the highest close since July 8.