Lundberg Survey – US Average Gasoline Price Makes its Largest Drop

The recently released Lundberg survey shows that in the past two weeks, the average price per gallon of regular gas in the United States made its largest fall since 2008 because of lower per barrel crude oil prices, a huge price cut in California’s gasoline prices and Hurricane Sandy.

The latest gasoline price average was lower by 20.75 cents, at $3.5454 a gallon. In the week of October 19, prices at the pump were $3.7529, according to the survey.

The drop was the largest decline in a period of two weeks since the poll posted a reduction of 21.9 cents on the 5th of December, 2008, because of a dip in demand for petroleum during the worldwide recession.

Even if a lot of people needed to wait in line for many hours just to fill their tanks after the damage brought by Sandy to the majority of the Northeast coast, Sandy became a factor in the decline reflected by the current gasoline prices since plenty of potential consumers weren’t able to travel because of the storm.

Moreover, Lundberg mentioned the seasonal fall in (gasoline) demand that usually occurs after August. While demand seems to be quite high in New Jersey and New York following the storm, purchases were lower since many people cannot obtain the fuel. But inventory shortages were not leading to a rise in the current gasoline price average, said Lundberg.

Retailers are afraid of being accused and prosecuted for gasoline price gouging if they significantly increase prices to avoid running out. Further, it is unlikely that the problems will end soon. It will take time and effort for infrastructure, fuel supply as well as fuel demand to recover, according to analysts.

Another cause for the drop in the current gasoline price average all over the United States is that California, the country’s largest consumer, saw their prices at the pump shed 49 cents in the last two weeks after an extreme rise in prices last month due to localized refinery issues.

According to the recent survey, the price of gasoline declined almost 29.21 cents in the previous month. The highest rate for regular gas posted in the latest survey was $4.05 per gallon in San Francisco, while the cheapest was at $3.11 a gallon in Memphis, Tennessee.

By: Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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