Gasoline approaches $4 a gallon on Long Island
Gasoline is approaching $4 per gallon again on Long Island because of more expensive crude oil and tight gas supplies.
Regular gas hasn't averaged $4 or more on Long Island since Nov. 21, in the aftermath of superstorm Sandy.
Analysts say the rise in prices won't be relentless. East Coast gasoline stocks are now improving, imports to this region from abroad are increasing and gasoline futures prices have leveled off, all suggesting that retail prices might soon peak.
Still, analyst Andy Lipow, president of Houston consulting company Lipow Oil Associates LLC, said "chances are quite good" the average for regular gasoline still might reach $4 here in coming weeks.
Heating oil, meanwhile, averaged $4.297 a gallon on Monday at dealers on Long Island, the state Energy Research and Development Authority said. That's the highest price since the end of November and 10.6 cents higher than a year earlier.
Crude oil prices have been rising on a combination of generally positive economic news worldwide, combined with growing demand from China and a cutback in production by the OPEC cartel, analysts said.
The benchmark North Sea European grade, known as Brent and used by East Coast refineries as well as foreign refineries supplying this region, was priced at about $116 a barrel Wednesday, almost $6 more than on Dec. 31. Benchmark U.S. crude settled Wednesday at $96.63 a barrel on the New York Mercantile Exchange.
While gasoline stocks on the East Coast last week were 7 percent lower than a year earlier at 58.1 million barrels, they were improved from the week before by 5 percent, the U.S. Department of Energy reported yesterday.
Demand for gasoline in the Mid-Atlantic region last week was up by 1.8 percent from a year earlier, according to the weekly MasterCard SpendingPulse report.
The Energy Department said Monday that gasoline now accounts for almost 4 percent of American households' pre-tax income, or about $2,900 -- the highest percentage since 2008, when crude oil spiked briefly over $140 a barrel. Gasoline prices rose by 26 percent in 2011 and another 3.3 percent last year, the department said. Average household incomes, however, rose by only 3.4 percent and 2.9 percent, respectively, in those two years, it said.
Gasoline prices in the East are being pushed upward also by anticipated further shortages from the announced closure by the end of this month of a Hess refinery in southern New Jersey, which accounts for 7.5 percent of Northeast production.
The AAA survey is based on the lowest price available at stations that charge less for cash than credit card purchases.
Regular has averaged as high as $4.34 a gallon on Long Island in the AAA survey -- in July of 2008.
Long Islanders' 2.6 million vehicles burn about 1.2 billion gallons of gasoline per year.