HOUSTON — As the Memorial Day weekend and the summer driving season approach, gasoline prices are easing. But most drivers will find prices only modestly lower than a year ago.
Nationwide, the price of a gallon of regular gasoline has drifted lower by about half a cent a day over the past month, and energy analysts say that trend should continue over the next few weeks, in at least some states.
Drivers are getting a respite, said Rodney Waller, a senior vice president at Range Resources, an oil and gas company based in Fort Worth, Texas. But its a tenuous respite based on all the changes in the global oil market and the opening and closings of refineries across the U.S.
Gasoline prices are dropping primarily because of a decline in global crude oil prices, which can be attributed to an easing of tensions in the Middle East and growing oil supplies, bolstered in recent months by the rapid return of Libyan oil exports and increased production from Saudi Arabia. Because oil is priced in dollars, the firming value of the dollar in recent weeks in the wake of the European financial crisis has also helped reduce prices.
The sluggish global economy has also reduced demand for oil and other commodities, particularly in Europe. Demand growth in China, a main driver of oil prices in recent years, has slowed in recent months. And while U.S. gasoline demand has diminished in recent months because of the soft economy, oil supply inventories recently reached a 22-year high.
Gasoline prices on the East Coast have fallen in part because one large refinery in Philadelphia that was scheduled to be closed by Sunoco at the end of June is now expected to remain open through at least most of the summer while the private equity firm Carlyle Group negotiates to form a joint venture. Prospects for future gasoline prices in the region have also improved since Delta Air Lines bought an idled Pennsylvania refinery, which will probably produce more gasoline for the market by October.
On the West Coast, however, particularly around Los Angeles, gasoline prices have actually risen in recent weeks because several refineries were forced to suspend operations because of power failures and repairs to compressors. But those problems are expected to be cleared up by June, and energy experts expect prices to ease afterward.
The diverging refinery situations are reflected in the wide gap in gasoline prices from one coast to the other. The average price for regular gasoline Thursday was $3.92 a gallon in New York but $4.31 a gallon in California.
The national average price for a gallon of regular gasoline Thursday was $3.67, nearly 30 cents below the high for the year reached in early April. A year ago, the average prices stood at $3.85 a gallon.
Energy analysts say prices this summer should remain a few cents lower than last year but about 75 cents a gallon above the level in the summer of 2010. The economic effect of the lower prices is tentative because prices could easily surge again.