Sky-high gas prices on LI fail to materialize
Mike Albanese of Hauppauge fills up his pickup truck with gas at the Gulf station at the Long Island Expressway and Old Nichols Road in Ronkonkoma. (Aug. 28, 2012) Credit: Newsday/John Paraskevas
Long Island drivers caught a break over Labor Day weekend as big increases forecast for gasoline prices failed to materialize.
Regular gasoline averaged $4.046 a gallon Wednesday morning in Nassau and Suffolk counties, the AAA said, up by less than half a cent from a week earlier.
Experts said prices remained stable because Hurricane Isaac did no serious damage to petroleum infrastructure in the Gulf of Mexico, while a Venezuelan refinery, shut Aug. 25 by a fatal explosion and fire, suffered little damage in its processing components. It was reported Wednesday to have resumed operations, with Venezuelan government officials predicting full recovery within days.
Still, analysts are awaiting a report Thursday from the U.S. Department of Energy that will show whether U.S. gasoline inventories have declined significantly since last week -- something that could cause wholesale and retail prices to rise.
About 95 percent of crude oil output from the U.S. Gulf and 6.7 percent of the nation's refining capacity was shut down by Isaac, the government said.
While the East Coast gets relatively little of its gasoline from the U.S. Gulf or Venezuela, prices here could have been affected by tight supplies resulting from Isaac and the refinery fire.
Addison Armstrong, director of market research at Tradition Energy in Stamford, said he doesn't expect much change in prices in this region any time soon.
"I would say you can expect steady to slightly downward prices over the next couple of weeks," he said.
Armstrong and Stephen Schork, editor of the petroleum trade newsletter The Schork Report, noted that demand for gasoline usually declines with the end of the summer driving season on Labor Day weekend. Moreover, starting in mid-September, refiners begin phasing in winter-type gasoline that is cheaper to produce.
Assuming that the encouraging reports from Venezuela are accurate -- and assuming no major increase in crude oil prices -- Schork also thinks prices will be stable to lower in coming weeks: "We can expect some relief."
That would leave prices for a while at a relatively high level, after rising by 41.6 cents since July 2. Experts attributed the increase to rising crude oil prices and tight supplies in this region, from the permanent shutdowns of a refinery in the Caribbean and one in Pennsylvania, and the temporary shutdown of another in Pennsylvania.
The Long Island average for regular gasoline reached its recent peak of $4.169 on April 10.
With Bloomberg News
