Lundberg survey says gas prices fall as refinery output rises
HOUSTON — U.S. refineries are flexing their muscles and helping lower gasoline prices in the middle of the peak driving season.
The average price for regular gasoline at U.S. pumps dropped 9.04 cents in the two weeks ending Friday, July 25 to $3.5795 a gallon, according to Lundberg Survey Inc. It’s based on information obtained at about 2,500 filling stations by the Camarillo, Calif.-based company. Prices are 9.51 cents lower than a year ago and are at the lowest level since March 21, the survey showed.
Retail prices declined as refineries processed the most petroleum in government records dating back to 1989 in the week ending July 11. Plants in the Midwest exceeded their nameplate capacity during that week.
“It’s really a mid-summer gift,” Trilby Lundberg, the president of Lundberg Survey, said in a telephone interview Sunday. “Refiners have been on a kick to run more crude, run at high rates and to cut price.”
The highest price for gasoline in the lower 48 states among the markets surveyed was in San Francisco, at $4.03 a gallon, Lundberg said. The lowest price was in Tulsa, Okla., where customers paid an average of $3.23. Regular gasoline averaged $3.83 on Long Island, N.Y., and $3.96 in Los Angeles.
Refineries processed 16.81 million barrels a day in the week ending July 18, just off the highs reached the prior week, Energy Information Administration data show.
Plants are taking advantage of the U.S. shale boom, which has raised oil production 65 percent in the past five years. The increased output has pushed the settlement price of U.S. benchmark West Texas Intermediate futures below European Brent every day since Aug. 17, 2010.
Gasoline futures on the New York Mercantile Exchange slipped 4.32 cents, or 1.5 percent, to $2.8653 a gallon in the two weeks ending Friday, July 25 as supplies grew on strong refinery production.
Gasoline stockpiles increased 3.38 million barrels to 217.9 million, according to the Energy Information Administration (EIA), the Energy Department’s statistical arm. Demand over the four weeks ending July 18 was 8.988 million barrels a day, 0.6 percent below a year earlier.
WTI crude rose $1.26, or 1.2 percent, to $102.09 a barrel on the NYMEX in the two weeks to Friday, July 25 as supplies at the delivery point in Cushing, Okla., fell to the lowest level since 2008.
Crude inventories in the U.S. fell for the fourth straight week, dropping 3.97 million barrels to 371.1 million in the seven days ended July 18, EIA data show.