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Gas is Up, but for How Long?

Posted on: Saturday, 19 July 2008, 03:00 CDT

By GREG EDWARDS

The average price of regular gas set a record in the Richmond area and across Virginia yesterday - $4.01 per gallon.

Could this be the last record high Richmond will see for a while?

In the past two days, the price of regular gas has fallen by nearly 20 cents per gallon on the New York Mercantile Exchange. Wholesale and retail prices tend to follow changes in futures prices.

Also, combining Tuesday and yesterday, the futures price of crude oil fell $10.58 a barrel, or 25 cents a gallon, signaling the possibility of even lower gas prices ahead.

Wholesale prices are coming down, but motorists are not going to see lower prices at the pump immediately, said Mechanicsville petroleum dealer John Zehler Jr. Gas in the tanks at many stations was delivered before the downturn in prices, he said.

Zehler is not predicting the end to $4-a-gallon gas based on the past two days of futures trading. If the trend toward lower prices continues through Friday and the Nymex price of crude oil falls from $134.60 yesterday to below $131 per barrel, he will reassess the situation, Zehler said.

"Has the back of oil been broken?" Zehler mused. "Or were these two down days in a market that still has a lot of legs?"

Some analysts, The Associated Press reported, see this week's big price swings in crude oil as a sign the market may have peaked.

Reasons cited for yesterday's $4.14 drop in the futures price of crude oil was an unexpected increase in crude oil and gas supplies. U.S. crude-oil inventories climbed 3 million barrels from a week ago, according to the U.S. Energy Information Administration. Analysts surveyed by Platts had expected a 3 million-barrel drop in crude supplies.

GASOLINE

-- Regular: $4.01

-- Local last year: $2.90

-- National: $4.11

-- +$.01 yesterday

Average price for regular, self-serve based on about 500 stations in Richmond and 13 surrounding localities.

To find real-time prices for your neighborhood, click on www.aaamidatlantic.com

-- Contact Greg Edwards at  (804) 649-6390  or gedwards@timesdispatch.com.

MEMO: THE MONEY PINCH

Originally published by Times-Dispatch Staff Writer.

(c) 2008 Richmond Times - Dispatch. Provided by ProQuest Information and Learning. All rights Reserved.

Source: Richmond Times - Dispatch

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