Gas prices could fall 45 cents a gallon in California next month
by Gary Richards, San Jose Mercury News
California drivers could be in for a big treat by Halloween, with gas prices dropping 40 to 45 cents thanks in part to a light hurricane season, an easing of tensions in the Middle East and refinery fixes at home.
Gasbuddy.com experts tracked prices from mid-September through Halloween over the past decade and found prices typically fell by 23 cents a gallon across the U.S. They believe the downward trend will be repeated — and they predict prices in California will fall by almost twice that much.
“Definitely,” said Gregg Laskoski, a senior petroleum analyst with Gasbuddy.com. “You’re going to see a pretty aggressive drop starting in the next week or two.”
California’s average usually is 25 to 30 cents higher than the nationwide price, but Saturday the gap stood at 52 cents. The U.S. average was $3.49 a gallon, and in California it was $4.01, according to AAA.
Here’s why the gap should narrow. Supplies are ample nationwide, the state’s annual conversion to a cheaper winter blend of fuel is underway, motorists are driving less and no significant storms threaten oil rigs in the Gulf of Mexico.
Also, the easing of military tensions with Syria and an apparent thaw in U.S.-Iranian relations have helped drop crude oil prices by a dollar or two a day for the past week. Gas prices have already declined by as much as 46 to 50 cents in some Midwestern states from a year ago and 15 cents or more from three weeks ago.
But West Coast drivers have seen a rapid rise of around 30 cents as maintenance problems at three refineries have trimmed production since Labor Day. Some stations selling gas for $3.63 a gallon then are charging $3.93 today.
But those refinery issues now have been mostly resolved, the gas is flowing again, and that should make prices tumble.
“Barring a hurricane or sudden turbulence in the Middle East, we’re confident that most metro markets across the U.S. will see their prices fall in this 20- to 25-cent range,” Laskoski said. He said the trend could extend into early December, with prices in the $3.10 to $3.30 range across the U.S. and even under $3 in places.
About time, California motorists say.
“How come gas in Austin, Texas, costs $2.98 to $3.10 a gallon and the prices in the Bay Area are $3.84 to $3.95?” asked Leroy Milam, of Castro Valley. “For a long time there was only about a 30-cent difference between Austin and the Bay Area. Are gas companies adding some mystery product to our gas to make it more expensive?”
Last Tuesday marked the 1,000th consecutive day the national average at the pump was above $3 — the longest such stretch on record, according to AAA. The current streak began Dec. 23, 2010.
“With the run-up based on Syria, we had a bit of a bubble being inflated,” Stephen Schork, president of the Schork Group in Pennsylvania, told Bloomberg News. “And when you cut off those headlines, all of that bubble is getting deflated.”
Especially, motorists hope, in California.
Current average gas costs:
United States: $3.49