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NEW YORK -- The average price for a gallon of regular gasoline in the U.S. fell more than 3 cents during the last two weeks to $2.94, due to shrinking margins on the refining and retailing sides and oversupplied market conditions, Reuters reported, citing the most recent nationwide Lundberg survey of approximately 7,000 gas stations.
The current price is about 3.5 cents per gallon less than the previous survey’s price, Reuters reported. However, gasoline prices are nearly 75 cents per gallon higher compared to a year ago, survey editor Trilby Lundberg told Reuters, adding that January is typically the slowest month for demand.
But with demand awakening as spring approaches, Lundberg told Reuters prices are poised to climb.
"The slight oversupply will end and prices will rise," Lundberg said. "The 3.5-cent drop comes not from crude, but from profit margin losses from refiners and gas retailers. Shrinkage in margins made for that drop at the pump."
Honolulu had the highest average price for self-serve, regular unleaded gasoline, at $3.35 a gallon, while the lowest price was $2.76 a gallon in St. Louis, according to the survey cited by Reuters.
In related news, prices for crude oil jumped as high as $94.72 a barrel yesterday, after Venezuela President Hugo Chavez threatened to stop sending oil to the U.S. The threat came after an ExxonMobil lawsuit against the country froze $12 billion worth of Venezuela's assets, in a move to compensate the company after the country took over an oil project, a separate Reuters report stated.
"If you freeze us, if you really manage to freeze us, if you damage us, then we will hurt you. Do you know how? We are not going to send oil to the United States, Mr. Bush, Mr. Danger," Chavez said on his TV show over the weekend, which was cited by Reuters.
On Monday, the White House administration dismissed the warning as "something that we've heard before," a separate Reuters report stated.
"We do not believe that there is any serious risk to oil supplies, but with the increased rhetoric we would be cautious before concluding that this development should be already fully discounted," Olivier Jakob, analyst at Petromatrix, told Reuters.