Long Island gas prices have been on a steady decline since hitting a year-to-date high in May, but that trend may soon end.
Due to a weaker dollar, passage of the austerity bill in Greece and a sharper-than-expected decrease in crude oil inventories, oil futures have been on the upswing for the last two days.
These new developments have many industry experts predicting that prices at gas stations will remain static, with the possibility of small increases as the July Fourth holiday weekend approaches.
"You're either going to see the street price stay the same right now . . . or move up a bit," said Kevin Beyer, president of the Long Island Gasoline Retailers Assocation. He added that the price changes for oil haven't affected the cost at gas stations yet, and that many retailers are waiting another day to see if the upswing will become a steady trend.
The average price of regular gas on Long Island was $3.917 Wednesday, down about 5.5 cents from last week and dropping 17.2 cents since this time last month.
Crude oil settled at $94.77 per barrel Wednesday, up $1.88 after rising $2.28 Tuesday. The increase comes after days of falling prices following the International Energy Agency's announcement last Thursday that it would be releasing 60 million barrels of oil from emergency reserves.
The surge in oil prices has essentially canceled out the intended effects of the IEA's measure, said Dominick Chiricella, a senior partner at the Energy Management Institute in Manhattan.
"I think we came into this week on the assumption that with added barrels from IEA, oil prices would go even lower," said Stephen Schork, editor of energy newsletter The Schork Report. But "that bearish momentum failed to carry over into this week," as the dollar weakened and the U.S. Energy Information Administration reported crude oil inventories falling by 4.4 million barrels.
Passage of the austerity bill in Greece also strengthened the euro against the dollar, which will push commodity prices up, said Peter Beutel, president of energy consultant firm Cameron Hanover Inc. in Connecticut.
Oil demand dropped last week, down 1.8 percent compared to last year, according to MasterCard Advisors' SpendingPulse weekly report.