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Gas prices are starting seasonal fall, Bloomberg data shows

Roy Davis, customer service representative, changes the sign showing a 2-cent price cut for regular unleaded gas at a Circle K gas station in Oklahoma City on Tuesday. The price of regular unleaded gas in the bay area has fallen 13 cents in a month to $3.626.

Associated Press

Roy Davis, customer service representative, changes the sign showing a 2-cent price cut for regular unleaded gas at a Circle K gas station in Oklahoma City on Tuesday. The price of regular unleaded gas in the bay area has fallen 13 cents in a month to $3.626.

DALLAS — Gasoline pump prices are poised to continue to drop by year end, if history is any guide, as refineries resume production, Europe exports more fuel to the East Coast and Americans drive less.

Prices at service stations may fall about 6.3 percent to $3.54 a gallon, according to eight years of seasonal data compiled by Bloomberg. Gasoline deliveries to the United States from Europe may rise 35 percent, according to the median of eight estimates in a Bloomberg News survey. Demand has declined an average of 3.6 percent from July through December during the past five years, Energy Department data show.

The trend toward lower prices at the pump is already evident in the Tampa Bay area. On Thursday, the average price for a gallon or regular unleaded gas locally was $3.626, according to AAA, which is down about 13 cents from a month earlier.

While prices usually drop during the third quarter, this year is different because plants on the East Coast and in the Virgin Islands were permanently shut, reducing supply. Pump prices rose as high as $3.871 a gallon last month nationally, a record for the period, AAA data compiled by Bloomberg show.

"The market is expecting the return of supply as we go through the course of October and the refineries in Europe get through their maintenance period," said Andy Lipow, president of Lipow Oil Associates in Houston. "Between now and the election, prices will fall moderately, 10 to 15 cents a gallon."

Production and supply may rise as retail outlets switch to winter-grade fuel, which doesn't have to meet as stringent emissions specifications and can be made from a wider variety of blendstocks, such as butane. Gasoline output has risen an average of 3.6 percent in the fourth quarter during the past five years.

Falling prices may remove gasoline as an issue for voters in the presidential election, said Andrew Lebow, senior vice president for energy at Jefferies Bache in New York.

"Are they going to make their decision based on gasoline prices?" Lebow said. "Not at $3.70 or $3.80. Maybe if they're above $4, they might be another factor to sway undecided voters."

While Americans purchased 3.8 percent less gasoline this year and the U.S. met 81 percent of its energy needs in 2011, the most since 1992, refinery closures have left East Coast stockpiles of motor fuel at a four-year low, Energy Department data show.

"The market was already on edge because of tight supply, but some wholesalers put off buying, hoping supplies would appear," said Phil Flynn, senior market analyst at Price Futures Group in Chicago.

Other economic data

Several U.S. economic reports were released Thursday. Here is a summary:

• September retail sales rose 3.9 percent — a slowdown from the 6 percent rise in August — as 22 retailers including Macy's and Costco reported mixed results, according to the International Council of Shopping Centers. Still, given the economic and political uncertainty that weighs on many Americans right now, analysts say the results are an encouraging sign for stores as they head into what's traditionally the busiest shopping period of the year in November and December.

• Orders to U.S. factories fell 5.2 percent in August from July, the Commerce Department said Thursday, mostly because of a 102 percent drop in volatile aircraft orders. The decline offset an increase in orders that reflect corporate investment plans. In a positive sign, orders for business equipment and software, often considered a proxy for investment plans, rose 1.1 percent, after two steep declines. Still, orders for steel, electrical equipment and industrial machinery all fell.

• The number of Americans seeking unemployment benefits rose 4,000 last week to a seasonally adjusted 367,000, a level consistent with only modest hiring. The four-week average, a less volatile measure, was unchanged at 375,000.

• Consumer loan delinquencies dropped to their lowest level in nearly six years during the second quarter of 2012 as households prioritized debt service over spending increases, the American Bankers Association said. Delinquencies across eight loan categories fell a total of 11 basis points to 2.24 percent of all accounts in the second quarter, the best showing since the fourth quarter of 2006, when the rate was 2.23 percent. The rate has now been below the 15-year average of 2.40 percent for two consecutive quarters, the ABA said.

Associated Press

Gas prices are starting seasonal fall, Bloomberg data shows 10/04/12 [Last modified: Thursday, October 4, 2012 8:54pm]
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