Consumers may soon expect further relief at the pumps, analysts said, after the United State joined 27 other countries in announcing plans to release 60 million barrels of oil from their reserves.
The effect of the announcement on crude oil was almost immediate as prices fell $4.16 to $91.25 a barrel before noon yesterday and settled even lower at $91.02, falling 4.6 percent in the lowest close since February.
If the decrease continues, the reserve release and other market factors should bring the average price of gasoline on Long Island to about $3.65 per gallon, said Peter Beutel, president of energy consultant firm Cameron Hanover Inc. in Connecticut.
But it could take a few days before any change is reflected at gas stations, though many industry experts said they expected a significant drop in prices.
“The magnitude of this decline is so big that you will start to see it pretty fast. Wholesale prices will certain come down today . . . there's no delay,” said John Kingston, director of news at the energy information company Platts. “But the decision at the corner is made by the individual retailer — he’s going to keep his price up as high as he can as long as he can. But of course it’s a very competitive market.”
Kevin Beyer, the president of Long Island Gasoline Retailers Association, said he usually waits until he sees a consistent two-day decrease or increase in wholesale prices before he alters the cost of his gasoline.
Retail prices for regular gas averaged $3.964 yesterday on Long Island, dipping barely one cent from Wednesday’s average, according to AAA’s Daily Fuel Gauge Report. That is down about 21.6 cents from last month, but still $1.01 higher than this time last year.
The price of gas has been steadily slipping since it hit a high of $4.284 in May, just 6.2 cents less than the record high set on July 8, 2008.
According to MasterCard Advisors’ SpendingPulse report, gasoline demand was up 0.4 percent last week compared to this time last year. John Gambler, a MasterCard Advisors analyst, said gasoline demand across the U.S. has been “flat to slightly positive” since prices started dropping in May.
Photo: Jorge Montoya of Amityville fills up his gas tank in North Amityville. Energy experts say the drop in the price of oil should show up in lower prices at the pump this summer. (June 15, 2011)
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