Gasoline prices fall on high supply, lower crude
By DAVID BIRD
NEW YORK -- Pump prices for gasoline are dropping as refiners are boosting production and crude-oil prices are down from a year earlier, according to travel group AAA.
Prices began the second quarter on Monday at a national average of $3.634/gal, down 7.4%, or nearly 30 cents/gal below a year earlier.
AAA projects that because of rising supply as refineries end seasonal maintenance shutdowns, retail gasoline prices won't climb to the April 2012 high of $3.94/gal. Data from the federal Energy Information Administration show refiners have boosted crude oil processing rates by more than 6% or, nearly 900,000 bpd, and increasing gasoline output in recent weeks.
"It is very unusual for gas prices to decline in early spring like we have seen this year," said AAA spokesman Avery Ash. "An increase in refinery production and lower oil prices in early March have combined to provide rare falling prices for motorists in comparison to recent years."
AAA said prices dropped 15 cents/gal, or 3.9% during March, which was the first decline in the month for 10 years. Prices normally rise in the month as refiners begin production of more costly cleaner-burning gasoline required in many areas to reduce smog when temperatures warm up in the peak spring-summer driving season.
Mr. Ash said lower crude oil prices, with US benchmark oil down $6/bbl from a year earlier, contributed to the drop in gasoline prices during March.
Prices rose by 10%, or 34 cents/gal, during the first quarter of 2013, but that was half of the size of 20%, or 65 cents/gal rise in the same period of 2012.
Retail gasoline price hit their peak so far this year at $3.79/gal on Feb. 27, but have fallen in 29 of the 33 days since then, AAA said.
Mr. Ash said it may be premature to say prices already have set their highs for the first half of the year, as AAA has no records of prices peaking in February. But he said while the possibility exists of a brief surge again in spring, prices aren't likely to reach last year's high of $3.94/gal hit on April 5 and 6.
Prices top $4/gal only in Hawaii and California today, compared with a month ago, when Alaska and New York joined these two states with prices above that benchmark.
Dow Jones Newswires
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