Drivers should see lower pump prices as demand wanes after summer driving seasonBy Sandy Shore, AP
Tuesday, September 7, 2010
Post-holiday pump prices should slide
Motorists should see pump prices slide again after spending a little more to fill their tanks over the Labor Day weekend.
Two separate surveys said the average retail price was about $2.682 for a gallon of unleaded regular gasoline as the weekend ended.
The national average was $2.682 a gallon Tuesday, according to AAA, Wright Express and Oil Price Information Service. That’s 0.5 cent higher than a week ago and 9.9 cents higher than a year ago.
Drivers in the West, Illinois and New York state saw the highest prices, ranging from $2.794 to $3.525 a gallon. The lowest prices were in Texas, parts of the Midwest and the South, the survey found.
The Energy Department’s Energy Information Administration said the average price was $2.682 a gallon on Labor Day. The survey found the average price had fallen across much of the country in the past week, exception in the Midwest and the Rocky Mountains.
Analysts expect retail prices to fall now that the summer driving season has ended with plentiful supplies still in storage. In addition, consumers are watching their dollars carefully as unemployment remains high.
“Demand probably did pick up a little bit going up into the holiday, which probably kept the prices up there,” PFGBest analyst Phil Flynn said.
The price of crude and other energy products retreated as fears about the global economy resurfaced following reports that European banks may have more risky government debt on their books than previously thought.
Benchmark crude for October delivery fell 51 cents to settle at $74.09 a barrel on the New York Mercantile Exchange.
The Wall Street Journal reported that EU stress tests of 91 banks in July understated some lenders’ holdings of potentially risky debt. The Financial Times said Germany’s top 10 banks will have to raise as much as $135 billion to meet new capital requirements.
Abundant supplies of oil will pull prices down over the next two months, with fewer drivers on the road and the winter heating season still to come, MF Global analyst Andrew Lebow said.
In other Nymex trading in October contracts, heating oil rose 1.70 cents to settle at $2.0743 a gallon, gasoline gained 1.34 cents to settle at $1.9329 a gallon and natural gas lost 8.7 cents to settle at $3.852 per 1,000 cubic feet.
In London, Brent crude rose 87 cents to settle at $77.74 on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Hungary and Alex Kennedy in Singapore contributed to this report.
Tags: Commodity Markets, Holidays, Occasions, Prices