Gas prices fall but pace could be slow because of supply issues; oil prices rise

Article courtesy of Associated Press

Gas prices are finally heading lower, but motorists shouldn’t expect the numbers at the pump to drop quickly this autumn.

The national average for retail gasoline fell about a penny Friday to $3.833 per gallon, according to AAA, Wright Express and the Oil Price Information Service. That’s down 4 cents from a week ago, the biggest weekly decline since early summer. The average price is still 50 cents higher than on July 1.

Gasoline prices typically drop in the fall as refiners begin selling winter blends of fuel, which are cheaper than those used in the summer to help curb pollution. This year, however, supplies are tight because of refinery outages in some regions, including the Gulf Coast due to Hurricane Isaac. And the gasoline futures market, which dictates the price at the gas station, has been volatile.

That all adds up to gradual relief at the pump.

“It’s going to be a slow pace of decline because it takes a while to catch up with the low stocks that we kind of faced after Hurricane Isaac,” said Tom Kloza, OPIS chief oil analyst. “Gasoline supplies are by all measure still pretty tight.”

Refinery issues have particularly affected the Northeast and the West Coast. Motorists in those areas, as well as Illinois and North Dakota are paying the highest average prices, from $3.971 per gallon to $4.419 per gallon.

The lowest average prices range from $3.592 to $3.70 and can be found in New Mexico, Texas, the lower Midwest and parts of the South.

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