Gasoline prices fall for fifth week in a row
Retail gasoline prices fell for the fifth straight week but are still well above historic levels for autumn.
This is the new normal for fuel prices in the U.S., according to a recent Energy Department report.
California drivers are paying an average of $3.815 for a gallon of regular gasoline, down two cents from a week earlier, the Energy Department said Tuesday. That is about 73 cents a gallon higher than the year-earlier price and shatters the old record for this week of the year of $3.47 a gallon set in 2008.
The national average fell to $3.417, down three cents, according to the Energy Department’s weekly survey of service stations. That broke the old record for this week of $3.15 a gallon set in 2008. It’s 59 cents a gallon higher than the year-earlier price.
This is happening at a time of year in the U.S. when demand for fuel is usually low, the ebb between the summer driving season and the family gatherings of the holiday season. In years past, this would normally result in a glut of fuel supplies that would force a much sharper drop in prices.
But these days, high global demand is keeping prices relatively expensive. U.S. refiners reap bigger profits by selling products to other countries, which keeps domestic prices higher than normal, Energy Department statistics show.
“Total U.S. exports of finished petroleum products have increased more than 60% since 2007 as markets have become more globally integrated. This trend is driven primarily by finished motor gasoline and distillate fuel oil (which includes diesel) which are increasingly exported to Latin America. Annual U.S. exports of gasoline and distillate increased by 133% and 144%, respectively, from 2007 to 2010,” according to the Energy Department’s most recent Short Term Energy Outlook.
The trend has continued in 2011, the Energy Department said, “with diesel exports averaging 730,000 barrels a day, a 32% increase over an average of 554,000 barrels a day during the same period in 2010.”
For these and other reasons, the Energy Department said it is expecting a national average of $3.47 a gallon for regular gasoline in the fourth quarter. That would be a record for end-of-the-year prices.
In other energy news, the U.S. benchmark West Texas Intermediate crude closed at $85.81 a barrel, up 40 cents. Brent crude, the international benchmark, rose $1.40 to close at $108.05 a barrel.
