News Column

Gasoline Pump Prices Drop, but Are Still High

Oct. 23, 2012

Simone Sebastian

gas prices

The national average gasoline price plummeted 12 cents during the week that ended Monday, the fastest weekly drop since 2008, AAA reported.

After 11 days of falling gas prices, U.S. drivers paid an average $3.67 per gallon of regular on Monday. That was down from $3.79 a week ago and down from $3.82 a month ago.

Compared with last year, however, drivers are spending about 20 cents more per gallon to fill up their tanks. Unrest in key oil-producing nations in the Middle East has kept crude prices steep during much of the year. Gasoline has set a daily record high each day for more than two months, according to AAA.

Fuel typically gets cheaper with the close of the summer vacation season. This year, the demand decline came as supplies were rebounding. A series of refinery issues, including closures during Hurricane Isaac and a fire at a California facility, constrained supplies during summer months and pushed gasoline prices to record levels.

The combination of falling demand and rising supply this fall has cut the cost of fuel.

"We're not seeing the same distribution problems we saw during the summer," AAA spokesman Michael Green said.

Midwestern states have fared particularly well, with gasoline dropping more than 20 cents over the week. The price decline has been less dramatic for Houstonians, who are paying an average $3.43, down 8 cents from a week earlier.

AAA expects the fuel price will continue to ease, dropping as low as $3.25 by Thanksgiving.

Crude oil futures settled at $88.73 a barrel Monday, a three-week low, as TransCanada is expected to soon restart its Keystone pipeline, the Associated Press reported. The pipeline was shut Wednesday after tests showed safety issues.



Source: (c)2012 Houston Chronicle Distributed by MCT Information Services


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