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Expert expects 20-cent gasoline price drop

A worker lowers gas prices at an Arco

A worker lowers gas prices at an Arco gas station in Mountain View, Calif. (August 18, 2009) Photo Credit: AP File

Gasoline prices seem to have begun their usual end-of-summer decline, dropping so far by just a few cents a gallon.

At least one expert thinks they'll drop by as much as 20 cents a gallon in coming weeks, firm up for a time as refineries shut down for maintenance and the switch to winter-grade gasolines and heating fuels, then decline more around the holiday season.

"What we're seeing now is the typical post-Labor Day market correcting lower," said Steven Schork, editor of the industry newsletter The Schork Report, based in Villanova, Pa.

Regular gasoline averaged $2.85 a gallon Wednesday on Long Island, the AAA said, down 2.5 cents from a week earlier. A year ago, it averaged $3.90 but was falling. It bottomed at $1.817 on Jan. 5, then started rising with crude oil.

The U.S. Energy Department said yesterday in a weekly fuels update that demand for gasoline in the United States dropped by 3 percent last week from the week before and was considerably below a year earlier. Meanwhile, gasoline stocks rose last week and were 12.5 percent above those a year earlier.

But the increase in crude oil prices - futures rose above $72 a barrel yesterday in New York trading - is not just the result of anticipated future demand; it also is a side effect of the dollar's weakening against foreign currencies, which makes oil cheaper for investors purchasing it because oil is priced in dollars and also makes oil attractive as a hedge against inflation.

Heating oil on Long Island averaged $2.706 a gallon on Monday at full-service dealers on Long Island, said the New York State Energy Research and Development Authority - about 34 percent lower than a year ago.

At least one team of weather experts predicts a colder winter than the past few in this area, based on the cooler-than-normal summer just ending and on climatological patterns such as El Niño. Said meteorologist Kate Walters at AccuWeather.com in State College, Pa., "We expect it to be a little colder and a little snowier than average in the Northeast."

About 65 percent of Long Islanders heat with oil, but a rising percentage use natural gas. National Grid's director of gas pricing, Jennifer Feinstein, has forecast that the typical residential heating customer will pay about 14 percent less next year than this year, or about $2,100 for 12 months.

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