Crude prices rising, but LI pump price isn't
Even though the mid-August price of oil is climbing, gas prices are not, according to current reports. This driver was fueling his vehicle in June at a Shamrock station in Baldwin. Credit: Newsday / Alejandra Villa
Despite an increase in the price of crude oil, gas prices may stabilize or keep falling because of low domestic demand and near-negligible changes in oil futures, analysts said Wednesday.
The average price of regular gas on Long Island Wednesday was $3.973, down 4.1 cents -- or 1.2 percent -- from the week before, according to AAA's Fuel Gauge Report. The cost of gas in Nassau and Suffolk has been on a steady and slow decline since Aug. 2. Nationwide, AAA reported the price of gas is down 5.3 cents at $3.584 per gallon Wednesday -- a 1.5 percent change.
Crude oil settled at $87.58 a barrel Wednesday, a 93-cent increase from the previous day. Oil futures are up overall compared with last week, but the price has seesawed this week, closing up and down alternatively on the past five days of trading.
The lack of consistency in crude oil prices has made retailers more cautious when pricing their gas -- which also helps explain the slow decreases in fuel costs, said Kevin Beyer, president of Long Island Gas Retailers Association.
Although oil futures dropped below $80 a barrel last week, the increases this week could have canceled out any effects.
"At the pump, it's never had a chance to go down," said John Kingston, director of news for energy information service Platts. "We went on a wild ride that lasted six or seven days, and they've all negated themselves," he said, referring to the yo-yoing in crude prices.
Consumers may expect further relief at the pump as retailers begin switching over next month to a winter-grade fuel mixture, which is cheaper than gas sold in the summer, industry experts added. The switchover could mean either a 15-cent drop in gas prices or a 15-cent price cushion in case crude oil futures surge, said Peter Beutel, president of energy consultant firm Cameron Hanover Inc. in Connecticut.
Last week, MasterCard's SpendingPulse Report found that gas demand was down 4.6 percent from a year ago.
