Experts see strong gasoline supplies, weak demand
Gasoline prices have crept up by 3 cents a gallon on Long Island in the past month, but experts are forecasting little change right through the July 4 weekend, amid strong supplies and weak demand.
"I'm not looking for any increase," said Andy Lipow, president of Houston consulting company Lipow Oil Associates LLC.
Regular gasoline averaged $3.803 a gallon Wednesday on Long Island, according to the motorist group AAA. A year earlier the average was lower, at $3.741, but earlier this year the local average had been over $4 from mid-February to early March.
U.S. crude oil is trading about $13 a barrel higher than at this time last year, when it cost about $83 a barrel; it closed Wednesday at $95.88. But oil priced to North Sea Brent, which is used to produce much of the gasoline sold on the East Coast, is cheaper than last year at this time. Brent crude was trading at between $107 and $111 in mid-June last year; it closed Wednesday at $103.49.
The current supply and demand picture suggests stable, even lower, prices in weeks to come, experts said.
The U.S. Department of Energy reported Tuesday that gasoline supplies nationally were up 9 percent last week from a year earlier, at 221.5 million barrels. Supplies on the East Coast were up 10 percent compared with last year, at 63.8 million barrels. Demand nationally was down slightly from a year earlier, at 8.5 million barrels a day.
The energy department said it expects demand nationally for all of this year to be the weakest in 12 years, as years of rising gasoline prices have encouraged Americans to drive less and buy more fuel-efficient vehicles.
In a short-term forecast last month the department predicted gasoline prices nationally would average $3.39 a gallon next year -- 11 cents less than its estimate for this year. On Wednesday, the national average was $3.634, the AAA said.
Regular gasoline has averaged as high as $4.34 a gallon on Long Island in the AAA survey, in July 2008. The survey is based on the lowest price available at stations that charge less for cash than credit card purchases.
Long Islanders' 2.6 million vehicles burn about 1.2 billion gallons of gasoline per year.