Analysts: Gas price drop may be temporary
Residents pump gas at the Gulf Station on 150 Morris Ave., Holtsville, after a slight decline in gas prices over the past week. (Aug. 2, 2012) Credit: Heather Walsh
Gasoline prices slipped a bit in the past week in what some analysts think is just a temporary dip.
Regular averaged $3.862 a gallon in Nassau and Suffolk Thursday, the AAA said, down 1.5 cents from a week earlier -- ending a month of weekly increases that experts blamed on higher crude oil combined with tight supplies on the East Coast of less polluting summer gasoline required by clean air laws.
The new average was 23.2 cents higher than a month earlier, but 20.5 cents lower than a year before.
The shortage arose from the closures late last year of four refineries that supply summer blend "reformulated" gasoline to the region -- two in the Caribbean and two in Pennsylvania. One of the Pennsylvania refineries is to resume operations after renovations -- but too late to affect gasoline supplies this summer.
Supplies of reformulated gasoline remain low, based on government inventory figures released Wednesday. There have been refinery issues elsewhere in the country, said Andy Lipow, president of Houston consulting company Lipow Oil Associates Llc. Also, weather forecasters are warning of a potential tropical storm, Ernesto, that could reach Gulf of Mexico oil fields next week. So, he said, "Yes, we have seen some temporarily [pump price] relief in the past week or so, but I think it's going to be short-lived."
Gasoline futures rose in trading Thursday on the New York Mercantile Exchange, although U.S. crude oil futures settled down $1.78 barrel at $87.13.
Not all analysts think prices will jump back up. Editor Stephen Schork of The Schork Report, an industry newsletter, said recent pump price reductions appear to reflect lower wholesale prices as September approaches, when demand drops seasonally and refiners can begin to sell a cheaper autumn grade of gasoline. "We're getting out of peak gasoline season and prices will be moving lower," he said.
In any case, demand for gasoline this summer has been soft -- down by 4 percent nationally last week from a year earlier, to 8.8 million barrels a day, the energy department said Wednesday. Gasoline has averaged as high as $4.34 a gallon on Long Island, in July 2008, in the AAA survey.
