Gasoline prices on Long Island have fallen further since the holidays to the lowest level in more than five years, as the price of crude oil plunged.
Regular gasoline averaged $2.534 a gallon in Nassau and Suffolk Wednesday morning, the AAA motorist group said -- down 11.5 cents from a week earlier, and $1.14 below a year earlier. The new average is the lowest since May 20, 2009, and $1.50 lower than the recent high of $4.036 a gallon on July 2.
Heating oil also continues to decline. It averaged $3.189 a gallon Monday at full-service dealers in Nassau and Suffolk, the state Energy Research and Development Authority said, the lowest price since Nov. 1, 2010 and 97 cents below a year earlier.
Even if crude oil prices don't fall any further, gasoline prices could drop by several cents in coming weeks, said Andy Lipow, president of Houston consulting company, Lipow Oil Associates LLC. "I think they still could drop about five cents a gallon," he said.
The picture beyond that is less clear. Low pump prices appear to be spurring gasoline demand and encouraging some motorists to buy larger vehicles. The U.S. Department of Energy reported Wednesday that gasoline demand last week was up 10.6 percent from a year earlier, at 8.875 million barrels a day.
Gasoline and heating oil prices nationally have been falling since July, largely due to an oversupply of crude oil. The oversupply stems from increases in U.S. production and the slowing of some world economies, including Europe, China and Japan.
The benchmark grade of U.S. crude oil has retreated from a recent high of $107.95 a barrel June 20 to prices in the $40s. It rose by more than $2 in trading Wednesday on the New York Mercantile Exchange, to $48.48. Lipow says it's too soon to conclude that the crude oil market is near bottom. He says the jump more likely resulted from the rise in gasoline demand and some refinery issues around the country.
Lipow and chief executive Kevin Rooney of the Oil Heat Institute of Long Island foresee no major changes in heating oil retail prices for the rest of the winter, barring a surge in demand for nearly identical diesel fuel. Rooney says virtually all the oil that will be sold to Long Islanders for the rest of this heating season has already been purchased or contracted for by his retailers so that increases beyond current prices are unlikely at least until later in the year.