Gasoline at U.S. service stations dropped to the lowest level in 11 months in the past three weeks as crude prices retreated and refineries came back on line after stoppages, according to Lundberg Survey Inc.
The average price for regular gasoline at U.S. pumps fell 9.62 cents in the three weeks ended Dec. 7 to $3.3766 a gallon, the survey of about 2,500 stations by the Camarillo, California-based survey company showed. The average, now the lowest since Jan. 6, has dropped 46.09 cents a gallon over the past nine weeks and is 59.1 cents below the year-to-date high of $3.9671 on April 6.
“Somewhat lower crude oil prices, refinery problems being reduced and resolved one after the other and demand coming down as it always does in the winter combined to create this drop,” Trilby Lundberg, president of Lundberg Survey, said in a telephone interview Sunday. “I’m expecting further drops at the pump, maybe as much as another dime,” barring a change in oil prices, she said.
The drop underscores how rising domestic crude production is eroding fuel costs in the world’s biggest oil consumer seven months after prices were headed back to $4 a gallon in the runup to the presidential election. Gasoline stockpiles rose 7.86 million barrels in the week ended Nov. 30, the most since Sept. 21, 2001, the Energy Department reported.
West Texas Intermediate has dropped 21 percent since reaching a year-to-date closing high of $109.77 on Feb. 24. Futures on the New York Mercantile Exchange fell 74 cents, or 0.9 percent, to $85.93 a barrel in the three weeks to Dec. 7.
Inventories declined 2.36 million barrels in the week ended Nov. 30 to 371.8 million, according to Energy Department data. Refineries ran at 90.6 percent of capacity, the highest level since Aug. 24. Gasoline production jumped 5.4 percent.
Gasoline futures on the Nymex slid 11.27 cents, or 4.2 percent, to $2.5974 a gallon in the past three weeks. Futures have dropped 24 percent since reaching a year-to-date high of $3.4166 on March 26. They traded at $2.6274 at noon London time Monday.
Oil may retreat this week on weak economic growth in Europe and a stalemate in budget negotiations in the U.S. on how to avert more than $600 billion in tax increases and spending cuts set for January, a Bloomberg survey showed.
Thirteen of 29 analysts, or 45 percent, forecast crude will decrease through Dec. 14. Nine respondents, or 31 percent, predicted a gain. Seven forecast little change. Last week, 33 percent of analysts projected an increase.
The European Central Bank this month cut its 2013 euro-area economic forecast to a contraction of 0.3 percent from 0.5 percent growth.
L.A., New York
U.S. House Speaker John Boehner said Dec. 7 that there was no progress in budget talks with the White House to avoid the so-called fiscal cliff. Obama, a Democrat, has said there won’t be a deal without an increase in taxes on upper-income taxpayers. Republicans want to cut spending on entitlements and other programs while keeping current tax rates in place.
Regular gasoline on Long Island, the highest price in the lower 48 U.S. states among the markets surveyed, was about $3.85 a gallon, down 32.32 cents since Nov. 18, Lundberg said. Los Angeles-area retail stations averaged $3.68, down 12.78 cents.
The lowest price was in Memphis, Tennessee, where customers paid an average of $3.04 a gallon.
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