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WASHINGTON — According to the U.S. Energy Information Administration’s (EIA) latest edition of This Week in Petroleum , the U.S. average retail price for regular gasoline decreased for the fifth consecutive week, falling 10.4 cents to $2.376 per gallon, according to NACS online.
"Over the past five weeks, retail prices have dropped a total of 55.2 cents per gallon. Nevertheless, this week’s price is 37.5 cents higher than this time last year,"reported EIA.
Retail gasoline prices were down throughout the country, with the Rocky Mountain region seeing the largest regional decrease of 12.2 cents to $2.464 per gallon. The Midwest had the lowest regional price in the country, falling 9.5 cents to $2.231 per gallon. East Coast prices fell by 10.9 cents to $2.396 per gallon. The West Coast averaged $2.623 per gallon and California prices lost 8.8 cents to $2.659 per gallon.
Retail diesel fuel prices fell 17.8 cents to $2.698 per gallon — the lowest price since Aug. 29, 2005. Over the last two weeks, the U.S. average retail diesel price has plummeted 45.9 cents per gallon, the largest two-week decline on record, according to the report.
Diesel prices were down throughout the country last week, with the Midwest seeing the largest regional decrease of 23.6 cents to $2.671 cents per gallon. The highest regional average price in the country was in the Rocky Mountain region, falling 17.2 cents to average $2.907 per gallon. East Coast prices were down 12.7 cents to $2.657 per gallon, the lowest regional price in the nation. West Coast prices averaged $2.821 per gallon, a decrease of 13 cents.
EIA also reports that while retail gasoline prices remain significantly higher than year-ago levels, they have tracked spot prices this summer and fall in a manner consistent with previous price run-ups.
"This relationship can be quantified to the point where we can predict fairly accurately how retail prices will behave given spot prices," said EIA, adding, "This analysis shows that it takes about a week for retail prices to begin to reflect changes to spot prices, and that it takes several weeks before retail prices fully reflect changes in spot prices. This lag explains why retail prices sometimes continue to move higher after spot prices have begun to drop."
While Hurricanes Katrina and Rita dramatically reduced crude oil production, perhaps the most severe damage to gasoline markets was caused by shutdowns from power outages, of major product pipelines, notes EIA. Once refineries got back on track, gasoline supplies improved enough to cause spot prices to dip below pre-hurricane levels, with retail levels following suit, NACS online reported.
"While retail prices have not dropped quite as much as spot prices in recent weeks, we would expect retail prices to continue to fall even if spot prices begin to flatten out," said the EIA report.