LI gas prices drop for third straight week

By TOM INCANTALUPOtom.incantalupo@newsday.comOctober 13, 2011

Gasoline dropped by less than three cents a gallon on Long Island in the past week, the smallest decrease in three weeks, lending credence to some analysts' predictions that prices are near the bottom for this season unless the economy tanks and oil prices collapse.

Regular averaged $3.735 a gallon Wednesday in Nassau and Suffolk, the AAA said. Last week, the average fell by 6.6 cents from the week before. It fell by 9 cents the week before that.

"If we do see more declines it will be very minimal," said Carl Larry, director of energy derivatives and research at Blue Ocean Brokerage Llc in Manhattan. He says supplies are tight and imports have fallen due to seasonal and other factors. And, he says, if demand for gasoline is relatively strong this winter -- perhaps because of low snowfall totals -- prices could increase again.

He and other analysts also have expressed concern about reduced East Coast refinery capacity causing supply to tighten in the coming months.

Earlier this week, Sunoco shut down a major portion of its Marcus Hook refinery south of Philadelphia for repairs. Larry said it might not restart because Sunoco announced Sept. 6 that it will sell or shut Marcus Hook and another refinery in the area.

ConocoPhillips announced Sept. 27 that it had begun to idle its refinery in Trainer, Pa., and that it shut permanently in six months if Conoco can't find a buyer. The three Philadelphia-area refineries account for about half of East Coast refining capacity -- about 700,000 barrels a day, according to the U.S. Department of Energy. "That's putting more pressure on the prices on the East Coast," Larry said.

Heating oil also fell, in the week ended Monday, by 4 cents a gallon, to an average of $3.887 at full-service dealers, according to the state Energy Research and Development Authority. It's still almost 79 cents a gallon pricier than a year ago and it costs the equivalent of oil at about $2.30 a gallon, as calculated by the Oil Heat Institute of Long Island and National Grid. With Bloomberg