Newspaper article THE JOURNAL RECORD

National Gasoline Prices Show Signs of Stabilizing

Newspaper article THE JOURNAL RECORD

National Gasoline Prices Show Signs of Stabilizing

Article excerpt

With Americans preparing to hit the road for the Memorial Day weekend, it appears that gasoline prices are stabilizing and the prospect for lower prices is improving as suppliers begin to rebuild their very low inventories.

"Retail prices have leveled off," said John H. Lichtblau, director of the Petroleum Industry Research Foundation, an industry consulting group.

After rising by more than 20 cents a gallon from early February to mid-May, the average price of regular gasoline has steadied, even dipping slightly from a peak of nearly $1.29 last Friday to just over $1.28 a gallon this week, according to a daily survey of retail gasoline prices around the country conducted by the Department of Energy.

Some analysts predicted that gasoline prices could begin to retreat soon, but they warned that another increase at the pump was possible this summer if demand rose at the unexpectedly strong pace of the last couple of years.

Frederick P. Leuffer, an oil analyst for Bear, Stearns, said that the recent buildup of gasoline inventories was a sign that oil refiners were beginning to catch up with consumption, contributing to the fall in wholesale prices by roughly a dime since their peak in mid-April. Another factor helping to hold down wholesale prices has been an increase in gasoline imports, mostly from Europe to the East Coast.

Pushing in the other direction, however, was the expectation that motorists this summer were likely to drive farther and faster in less fuel-efficient vehicles, sustaining demand at such high levels that many refiners will be straining to keep up.

Given these competing forces, Leuffer said, "It's hard to say what will happen at the pump."

The partial lifting this week of the oil embargo against Iraq, allowing it to bring about 700,000 barrels of crude oil a day onto the world market, is not expected to have any near-term effect on retail prices. But Lichtblau predicted that gasoline prices could fall significantly two to three months from now as those additional barrels begin to work through the supply pipeline. …

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