Gasoline price decline stalls on LI
Drivers Wednesday will find prices at the pump considerably lower than last July 4.
But the steep decline in gasoline prices that Long Island drivers have enjoyed since April has stalled, leading at least one prominent analyst to expect prices to rise a bit in the weeks to come.
Regular gasoline averaged $3.633 a gallon on Long Island Tuesday morning, according to the AAA. While that price is 54 cents less than on April 10, the decline in the past week was less than a penny.
Tuesday's average was 28.1 cents lower than a year earlier.
Andy Lipow, president of the Houston consulting company Lipow Oil Associates LLC, blames tight supplies in the Northeast on the idling last year of a ConocoPhillips refinery in Trainer, Pa., and another in St. Croix, both of which supplied this region. Delta Air Lines has purchased the Pennsylvania refinery and plans to restart it, primarily to produce jet fuel.
Also in short supply, Lipow said, is an ingredient used in production of the summer-grade gasoline required in this region by clean air laws.
"I'm expecting over the next couple of weeks we'll start to see gasoline prices tick up a little bit," he said.
Another petroleum analyst, Stephen Schork, editor of The Schork Report, sees any such increase short-lived, arguing that gasoline supplies, even in this region, are adequate.
Lipow noted that U.S. benchmark-grade crude oil, which traded at $77.69 a barrel last Thursday, has risen since Friday.
Behind the price rise: Indications Friday that a resolution could be found for the European debt crisis and Tuesday's news of long-range missile tests by Iran, an event raising anew the possibility of an interruption in Mideast oil supplies.
Tensions between the West and Iran caused oil and gasoline prices to soar earlier this year. But as those concerns eased and economic news worsened, crude oil fell -- from almost $110 a barrel in February. There were similar declines in European benchmark Brent crude oil, used to produce much of the gasoline sold on the East Coast. Gasoline followed crude oil down, from $4.169 a gallon on April 10.
Tuesday, U.S. crude rose by $3.91 to settle at $87.66 a barrel, which Bloomberg News said was the highest close since May 30.