Gasoline prices continue to fall on LI

The decline in gasoline prices since Labor Day accelerated in the past week, with regular falling almost 9 cents on Long Island from a week earlier, the AAA said. At least two experts, however, say prices might be nearing bottom now.

Regular averaged $3.829 a gallon on the Island Wednesday morning, the motorist group said, representing a 12-cent-a-gallon decline in the past 30 days.

Price declines had been forecast by experts, citing reduced demand with the end of the summer driving season, the gradual switch this month to less-expensive winter gasoline, and weak crude oil prices.

But the decline could be arrested as Conoco-Phillips and Sunoco plan to sell or shut down in coming months three Philadelphia-area refineries that account for about half of the East Coast's refining capacity -- about 700,000 barrels of oil a day, according to the U.S. Department of Energy.

Carl Larry, director of energy derivatives and research at Blue Ocean Brokerage Llc in Manhattan, said the loss of their capacity could help push prices upward at local pumps, by making the region more dependent upon expensive imports from Europe.

Larry said it's likely the refineries will slow their output in coming weeks. "It doesn't make a lot of sense to keep them running at these high levels," he said.

Even without that factor, Sander Cohan, a principal and gasoline analyst at Energy Security Analysis Inc. in Wakefield, Mass., says he thinks any further decreases in pump prices will be modest as refineries begin scheduling seasonal shutdowns for maintenance and as supply becomes better synchronized with seasonally falling demand.

The highest average price for a gallon of regular gasoline on Long Island so far this year was $4.284 on May 12 -- 6.2 cents shy of the record $4.346 set July 8, 2008. Longislandgasprices.com, which is based on motorist reports, yesterday posted prices for regular as low as $3.49 a gallon at two stations in Bay Shore and as high as $4.59 a gallon at a station in Smithtown.

Demand nationally last week was 2.7 percent lower than a year earlier, with 61.1 million barrels sold at U.S. gasoline stations, according to MasterCard Advisors.

Heating oil's price on Long Island also fell in the past week to an average of $3.927 at full-service dealers, according to the state Energy Research and Development Authority.