Gasoline Prices Ease Back Down
With oil prices slipping and gasoline supplies plentiful, service stations around the nation are posting smaller numbers, an Energy Department report showed Monday.
In California, the average price of self-serve regular eased 2.2 cents to $2.522 a gallon, the first decline in six weeks, according to the agency’s weekly survey of filling stations.
Prices fell further in most other parts of the country, particularly the Midwest (down 9.1 cents) and the New England and lower Atlantic regions (both down 5.7 cents). The U.S. average tumbled 5.8 cents to $2.284 a gallon, the third consecutive drop.
Gasoline prices have moved lower with oil and gasoline futures, as growing inventories have soothed supply concerns.
In addition, prices outside of California were driven lower because suppliers unloaded gasoline stocks containing the additive methyl tertiary butyl ether, or MTBE, said Tom Kloza, chief oil analyst for Oil Price Information Service. Congress last year failed to pass liability protection for makers of MTBE, which has been banned in California since 2004 because of its link to water contamination.
But the cool-down in the cost of filling up won’t last for long, analysts warned.
Demand will increase in the spring just as several states, led by California, switch to summer gasoline blends, analysts warned. The formula for summer gas is trickier and produces lower volumes because certain additives, such as butane, must be removed to reduce evaporation during warm weather.
“The next few weeks will be as good as it gets over the next nine months,” Kloza said.
Jeff Spring, spokesman for the Automobile Club of Southern California, said motorists were experiencing “the flat part on an upwardly climbing staircase and the problem is we don’t know how many steps are on it.”
“From what our analysts are telling us, it’s just a bit of a breather,” Spring said. “Prices will head back up again.”
California’s average pump price remained 43.1 cents higher than a year ago while the U.S. average was up 38.6 cents.
The average price of diesel fuel slipped 3 cents a gallon in California to $2.709 a gallon, 51.3 cents higher than in the same week of 2005. The U.S. diesel average declined 2.3 cents to $2.476 a gallon, 49 cents higher than a year ago.
In New York futures trading Monday, light, sweet crude oil for March delivery fell 60 cents to $61.24 a barrel. March gasoline dropped 3.09 cents to $1.431 a gallon.
March heating oil futures settled at $1.639 a gallon, down 40 cents. March natural gas futures fell 7.3 cents to $7.243 a million British thermal units.
