Gasoline prices – finally – begin to slide
10/20/2012 12:16 PM
10/20/2012 12:16 PM
Gasoline prices have begun their seasonal slide.
And although the downward trend is popping up a little later this year than usual, local experts say price decreases will likely continue through early 2013.
“We’re certainly going to see … some pretty compelling drops in gasoline prices in the next few days,” Jim Hanni, an executive vice president for public affairs at AAA, said Friday.
“We’re already beginning to see some retail numbers flirt with $3 per gallon” in parts of Ohio, Indiana and other Midwestern states, he said.
Nationally, average retail prices have fallen for 10 straight days. On Friday, Wichita gasoline prices averaged $3.53 per gallon, 21 cents cheaper than the national average of $3.74.
But some local stations are offering better deals. By early afternoon Friday, some stations around town dipped below the $3.40 per gallon mark. One, a Presto convenience store on North Seneca, dropped to $3.34 by 2:30 p.m., Hanni said.
Popular local vendor QuikTrip was priced at $3.46 at most of its Wichita locations Friday afternoon, he added.
The average cost for gasoline in Wichita is still about a quarter more than last year’s prices at this time — $3.29 per gallon — and is 3 to 6 cents higher than Topeka, Lawrence and Kansas City. But Hanni said Wichitans may see similar prices before long.
“It’s quite possible that these things are going to drop back into that area,” he said.
Gasoline prices typically decline in the fall as refiners switch to cheaper fuel blends and drivers take a break from road trips. This year a series of refinery and pipeline problems sent gasoline supplies plummeting. That, in turn, sent wholesale gasoline buyers and traders scrambling to purchase whatever they could, at ever higher prices, to secure supply.
But the panic buying “that marked the end of September and the beginning of October has been replaced with panic selling,” AAA’s Hanni said, “and that is helping those gas prices come down.”
Darin Newsom, a senior market analyst for the Omaha-based Internet trading firm Telvent DTN, expects prices to drop through December. The dip should be followed by “a little pop” in prices around Christmas, then a continued downward trend through early 2013.
Barring factors that drive prices up – weather events, strategic investment moves or increased tensions in the Middle East – Newsom expects gas prices to bottom out in late January or early February, when gas prices typically hit their yearly lows.
“I’m not looking for an unusual spike that would drop supplies again,” he said. “I think we can get through the end of the year with the market working lower.”
The steady decrease in prices appears to mark the beginning of the usual autumn decrease that was delayed this year because of refinery problems and high oil prices.
The national average price kept rising after Labor Day, when prices normally start to fall. It topped out for the season at $3.87 on Sept. 14 and California prices hit a record $4.67 per gallon on Oct. 7. On the East Coast, gasoline supplies dipped to a four-year low, keeping prices stubbornly high.
Then – finally – the market began to stabilize. The government reported Wednesday that gasoline supplies are heading back up after falling for 10 of the last 11 weeks.
That led to a dramatic drop in wholesale gasoline prices in regional spot markets, according to Tom Kloza, chief oil analyst at the Oil Price Information Service. He said that will soon translate into lower prices at the pump.
“There’s some nice relief coming,” he said.