gasoline price falls, may drop more
28 September 2008

The national average price for self-serve, regular unleaded gas fell 3.8 cents to $3.6582 a gallon on September 26, from $3.6963 two weeks earlier, according to the nationwide Lundberg Survey. Diesel fuel fell 9.7 cents to $4.1627 a gallon from $4.2597.  "Ike reduced driving in areas that were damaged," Trilby Lundberg, who compiles the survey, said in an interview. "Retailers also kept prices in check, perhaps to avoid being accused of price gouging."

Ike slammed into the Texas coast on September 13. A comeback in refining capacity, along with higher imports, is now adding supply and "will allow for further price cuts immediately," Lundberg said.
The Lundberg survey evaluates prices at about 5,000 gas stations. That is down from 7,000 two weeks ago, reflecting a new sampling model that Lundberg said does not affect the survey's accuracy. The price of a gallon of gasoline is down more than 45 cents from the record $4.1124 set on July 11.

According to Lundberg, the U.S. Southeast region had occasional supply outages following Ike, triggering unusually large price increases. The average pump price rose to $4.14 from $3.75 two weeks earlier in the Atlanta area, and to $4.07 from $3.90 around Charlotte, North Carolina, but will likely fall back as supply problems are fixed, she said.  "Demand falls seasonally every September, and is also declining this year because of high prices and the weaker economy," Lundberg said. "Retail prices should continue to slide, but are unlikely to go back to $3 a gallon absent a global collapse in crude oil demand."

NYMEX crude for November delivery settled Friday just below $107 a barrel, more than $41 off its peak on July 11, Reuters data show. According to the Lundberg survey, drivers in Honolulu are paying an average $4.15 a gallon for unleaded gas, the highest price in the nation. The Wichita, Kansas, region had the lowest average price, at $3.29 a gallon.

Jonathan Stempel,  www.reuters.com