Average retail gas prices in the US fell slightly on Thursday, to $3.21 per gallon, according to the AAA, after falling four cents over the week.
Gas prices are set to reach their lowest level this year on high supply and lower demand, while wholesale gas markets dropped to 43.75 cents below futures.
In an interview with Bloomberg, Andy Lipow, president of Houston-based Lipow Oil Associates LLC, predicted that gas prices would dip to $3.15 by year’s end.
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“We’re going to see significant increases in gasoline inventories the next few weeks,” Bloomberg quoted Lipow as saying. “Refiners will maintain their high rates of utilization while demand declines toward its seasonal low in January and February.”
The drop in prices is due to a combination of factors, including unseasonably cold weather, less driving, peak processing at refineries and an increase in gas inventories.
In the meantime, while the oil industry in the US is trying to convince the public that it could push gas prices down further if the ban on most crude exports was lifted, a Reuters poll shows that Americans remained concerned that the reverse would be true.
Fear of potentially higher gas prices is shaping an intensifying debate about lifting the ban on US crude oil exports. The US banned most oil exports after the Arab oil embargo of the 1970s.
While the Reuters poll found that on the topic of allowing crude oil exports, American voters are evenly divided—until gas prices are worked into the equation. The poll showed a large majority would oppose crude exports if they thought it would translate into higher prices at the gas pump, while a majority also thought gas exports should be restricted.
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On Friday, oil prices eased after gaining 1% a day earlier on reduced stockpiles and signs of stronger demand, while benchmark US crude for February delivery was down 29 cents to $98.75 per barrel on the New York Mercantile Exchange.
Natural gas maintained a 29-month high of $4.46 per thousand cubic feet on Nymex, after climbing 5% the day before on the government’s announcement of a major draw in supplies because of the colder-than-normal weather.
By. Charles Kennedy of Oilprice.com