Pump Prices in U.S. Fall to Lowest Since FebruaryLynn Doan, Jessica Summers and Lananh Nguyen
Gasoline prices at U.S. pumps may decline further from a seven-month low as falling crude costs and less stringent fuel regulations boost supply, according to Lundberg Survey Inc.
The average price of regular gasoline slid 8.9 cents in the two weeks ended Sept. 19 to $3.3741 a gallon, the lowest since Feb. 7, according to the survey, which is based on information obtained at about 2,500 filling stations. Prices are 14.66 cents lower than a year ago and may drop by a few more cents, the Camarillo, California-based researcher said.
U.S. crude prices have dropped by more than $10 a barrel since reaching this year’s peak in June. Refineries ran at 93 percent of capacity in the week ended Sept. 12, the most for this time of year since 2006, taking advantage of rising oil production from shale formations. Ethanol futures have dropped by half since early April, encouraging blenders to mix more of the biofuel into gasoline.
“In this period, oil prices did migrate a little further South,” Trilby Lundberg, the president of Lundberg Survey, said in a telephone interview. “Plus, U.S. refiners slashed their wholesale gasoline prices and were aided in this by lower cost winter blend formulations affecting most of the country and a crash in ethanol prices.”
Retail gasoline is the lowest for the time of year since 2010 as refiners take advantage of cheap, domestic crude to run at the highest rates in eight years.
Plants processed 16.3 million barrels of oil a day in the week ended Sept. 12, a seasonal record in Energy Information Administration records dating back to 1989. Refinery inputs reached an all-time high of 16.6 million barrels a day in July.
West Texas Intermediate crude, the U.S. benchmark priced in Cushing, Oklahoma, dropped 88 cents, or 0.9 percent, to $92.41 a barrel on the New York Mercantile Exchange in the two weeks to Sept. 19 and were down $1.02 to $91.39 at 11:58 a.m. in New York. Prices touched $107.73 a barrel June 20.
“Lower crude oil prices have been the main input over these 13 weeks of pump price-cutting,” Lundberg said. “However, in the latest two weeks, the crude oil price declines were not as dramatic as it had been.”
The higher production is coming as consumption declines seasonally after the end of summer, typically the peak demand period. Over the past four weeks, the amount of fuel supplied to the market was 8.98 million barrels a day, up 0.4 percent from a year earlier and down from 9.2 million at the end of May.
October ethanol futures were trading at $1.635 a gallon on the Chicago Board of Trade, after the front-month contract touched $3.578 April 1. Ethanol can make up as much as 10 percent of a barrel of gasoline.
The highest price for gasoline in the lower 48 states among the markets surveyed was in San Francisco, at $3.79 a gallon, Lundberg said. The lowest was in Jackson, Mississippi, where customers paid an average $3.03 a gallon. Regular gasoline averaged $3.58 a gallon on Long Island, New York, and $3.70 in Los Angeles.
Gasoline futures on the Nymex climbed 2.8 cents, or 1.1 percent, to $2.6114 a gallon in the two weeks ended Sept. 19.
Gasoline stockpiles fell 1.64 million barrels, or 0.8 percent, in the seven days ended Sept. 12 to 210.7 million, EIA data show. Demand over the four weeks ended Sept. 12 slipped 0.2 percent to 8.98 million barrels a day, the lowest since July.