Long Islanders are getting a midsummer break on gasoline prices amid strong supplies and the absence, so far, of interruptions in worldwide oil production or shipments from fighting in Iraq, Gaza and Ukraine.
Regular gasoline averaged $3.888 a gallon on Long Island Thursday, the motorist group AAA said, dropping below $3.90 for the first time since April 22.
The average reached a recent high of $4.036 on July 2.
Oil futures react to almost any international incident and traders had bid up prices in recent weeks in response to civil war in Iraq, fighting between separatists and government loyalists in Ukraine, and fighting between Israel and Hamas in Gaza. Iraq is a major oil producer. Ukraine is a major conduit of natural gas via pipelines from Russia to Europe. So far, though, petroleum supplies have been largely unaffected by those international events.
"There was significant concern, but the oil never went missing," said editor Stephen Schork of The Schork Report, an energy newsletter published from Villanova, Pennsylvania.
Meanwhile, federal government figures released Wednesday show U.S. refineries running at a high 93.5 percent of capacity as refiners take advantage of relatively cheap crude being produced in the American West by hydraulic fracturing. As a result, gasoline supplies are strong -- at 218.2 million barrels nationally in the week ended July 25, a four-month high, according to Bloomberg News.
Demand, meanwhile, averaged 1 percent less nationally over the past four weeks than a year earlier, at 8.95 million barrels a day, according to the government.
The U.S. benchmark grade of crude oil, which most U.S. refineries use, had risen from $91.36 a barrel on Jan. 9 to a recent high of $107.95 a barrel June 20.
It since has declined, settling Thursday at $98.17 a barrel, down $2.10, on the New York Mercantile Exchange. Its price was further weakened, analysts said, by word that an unplanned shutdown of a Kansas refinery that had been a major consumer of the benchmark U.S. crude might last for weeks.
Schork expects gasoline prices to remain stable the rest of the summer."Absolutely stable," he said, "although there may be some firmness as demand picks up before Labor Day."