U.S Gasoline Retail Price Drop Continues Due to Oversupply

The widely followed market research company, Lundberg Survey Inc., released a report on Sunday showing the average price for regular gasoline in the U.S. has dropped by 7.61 cents in the last couple of weeks to $3.5985 per gallon due to oversupply.

The average price of the gasoline per gallon costs $3.6746 in Juy 26 then fell to $3.5985 on Aug. 9. The figures weretje average computation of the prices taken from 2,500 gasoline retail stations by the research company.

Trilby Lundberg, president of the Lundberg survey said in an interview with Bloomberg that the decline is mostly due to incredible performance of U.S. refiners. He also said, “They have been producing so much gasoline that it verges on a glut. To move these plentiful gallons, they have been slashing their wholesale prices to their marketers and retailers.”

Among the markets surveyed in the lower 48 U.S. States, the highest priced gasoline were in San Diego and Chicago, having the average of $3.92 per gallon while the cheapest at $3.27 per gallon was found in Charleston, South Carolina.

Possibility of further decline in gasoline prices shall be expected in the coming weeks.

Gasoline costs fall as inventories bubble up and President Obama’s administration eased worry that higher ethanol blending costs will cut back fuel supply.

On August 6, the Environmental Protection Agency told Bloomberg that the blenders and refiners will have four more months to achieve this year’s requirement to blend with gasoline 13.8 billion gallons of ethanol under the 2007 Renewable Fuels Standard. They also stated that it “anticipates proposing adjustments” to next year’s level, which is expected to reach 14.4 billion gallons.

According to the records of the statistical arm of the Energy Department, the Energy Information Administration, the stock piles of U.S. gasoline increased to 135,000 barrels equivalent to 223.6 million from July 27 to Aug. 2. That is the highest level during this time of the years in weekly records since 1990.