The average price for gasoline at U.S. pumps tumbled to the lowest level in almost eight months as crude oil price cuts reduced costs.
Regular gasoline slid 6.4 cents to $3.5207 a gallon in the two weeks to Sept. 20, the least since Jan. 25, according to Lundberg Survey Inc. The average, which reached a year-to-date peak of $3.795 on Feb. 22, is about 31 cents below the year-earlier price of $3.8338 a gallon.
Gasoline slid as crude fell to a one-month low, cutting the cost of production. The lowest price in the contiguous 48 states among the markets surveyed was in Charleston, South Carolina, with an average of $3.14 a gallon, according to the data, which is based on information from about 2,500 filling stations by the Camarillo, California-based company.
“Crude oil price cuts have moved down the supply chain,” Trilby Lundberg, president of Lundberg Survey, said in a telephone interview yesterday. “That’s allowed refiners to cut wholesale prices, which means retailers are now buying at lower prices.”
West Texas Intermediate crude for October delivery dropped $1.72, or 1.6 percent, to $104.67 a barrel on the New York Mercantile Exchange Sept. 20, the lowest settlement since Aug. 21. Prices fell 5.3 percent from $110.53 on Sept. 6, when Lundberg conducted the previous survey.
The highest price for gasoline was in San Francisco, where the average rose about 16 cents to $4.01 a gallon. The motor fuel averaged $3.75 a gallon on Long Island, New York, and $4 in Los Angeles. Prices climbed to $3.9741 in California, moving opposite the national average, because of “refinery glitches,” Lundberg said.
Outages occurred at Phillips 66’s Los Angeles refinery and Valero Energy Corp.’s Benicia plant in the past two weeks. The sites have a combined capacity of 309,000 barrels a day, according to data compiled by Bloomberg.
Gasoline futures for October delivery on the New York Mercantile Exchange fell 16.95 cents, or 5.9 percent, to $2.6842 a gallon in the two weeks to Sept. 20.
Futures dropped for three consecutive weeks as refineries operated at the highest seasonal rates in Energy Information Administration data going back to 1989. U.S. plants processed 16.5 million barrels a day of crude and other feedstocks in the week ended Sept. 15.
Gasoline stockpiles are 5.2 percent above the five-year average for this time of year after dropping 1.63 million barrels in the week ended Sept. 13 to 216 million, according to data from the EIA, the statistical arm of the Energy Department.
Crude inventories slipped 4.37 million barrels in the week ended Sept. 13 to 355.6 million. Stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell 861,000 barrels to 33.3 million, the lowest level since February 2012.
WTI will probably decline this week after a U.S.-Russian accord reduced the risk of an American attack on Syria and speculation that Middle East shipments will be curbed, a Bloomberg survey showed.
Fifteen of 34 analysts, or 44 percent, forecast crude will decrease through Sept. 27. Thirteen respondents, or 38 percent, predicted an increase and six said that there would be no change.