Why gas prices are still falling

Even after Superstorm Sandy, they're at their lowest levels since March.

By Kim Peterson Nov 2, 2012 3:28PM
It's hard to believe gas prices are falling, with reports of long lines at Northeast filling stations, price gouging and even fistfights among frustrated drivers.

But prices at the pump continue to drop nationwide. And the bottom line continues to be this: People in Superstorm Sandy's path are using significantly less gas. Either they aren't driving much or they simply can't find gas because so many filling stations are without power.

That sudden slowdown is helping gas prices fall across the country.
Friday, the national average for a gallon of gas dropped below $3.50 for the first time since March, CNBC reported. Gas has fallen by 8 cents in the last week and 28 cents in the last month. You can see the national average at AAA's fuel gauge report.

Another reason gas prices are falling is because oil prices are dropping as well. Oil has drifted lower in Canada, North Dakota and parts of Texas, CNBC reported, and the price of oil is seen as an indicator of future gasoline prices.

But not everyone is seeing cheaper gas. There were numerous reports of fuel gouging in New Jersey, despite the state's anti-gouging laws. In fact, some stations had raised prices by as much as 30% in one day, a spokesman for the state's consumer affairs department told NBC News. The law only allows a maximum 10% markup.Image: Buying gas ( moodboard/Corbis/Corbis)

AAA estimated that 60% of New Jersey gas stations and 70% of those on Long Island has closed after Sandy's devastation, CBS News reported. For many stations, it was the lack of electricity that presented the biggest problem, not a lack of gasoline.

Only two of the region's refineries were shut down this week, the Associated Press reported. The Phillips 66 (PSX) plant in Linden, N.J. briefly lost power and was flooded in parts, and a Hess (HES) refinery in Port Reading, N.J. was also down. Another company, NuStar (NS), said some of its terminals were damaged by water, CNN reported. Shares of Phillips 66 were down 2.2% Friday, while Hess shares were up less than 1% and NuStar fell 1.2%.

More important is whether New York Harbor has enough power going to its giant oil storage tanks and pipelines so that it can accept fuel deliveries and distribute gas to the region.

The main roadblock to providing gasoline in the Northeast is power. Once gas stations and the fuel operations in New York Harbor see electricity return, then the Northeast can resume its normal fuel consumption.

But for now, the rest of the country can benefit from more supplies and a decline in the price of gas -- a decline that AAA estimates should continue through Thanksgiving.

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Tags: HES
Nov 2, 2012 8:59PM
lets see what the price of gas goes to after the election.
Nov 2, 2012 8:40PM
Plain & simple market manipulation! Anyone should know that this sudden down-swing in gas prices is being done to bolster Obama before the election! Just like the false & mis-leading drop in unemplyment. Come on folks, wake up & look at a desperate incumbent trying to save his but!
Nov 2, 2012 8:32PM

This article has it WRONG!  The day after Sandy hit, here in Lexington, the price of gas at the lowest priced station went from $3.18 to $3.45/gallon!  Falling?  NOT!!!


Nov 2, 2012 8:18PM
But ... but ... wasn't it yesterday they reporting that because of the storm ...... GAS PRICES will go up !!!
Nov 2, 2012 8:09PM
I'm sorry but ours in NW Colorado haven't dropped yet, when do we become part of this event?
Nov 2, 2012 7:54PM
Don't forget diesel is costing you money every day. when trucks have to pay more for diesel its passed down to you. its a way for government to tax the people without us knowing.
Nov 2, 2012 7:41PM
falling, where it went up 3 cents here today
Nov 2, 2012 7:29PM

Because its a few days before the election.  Part of the four part plan.  Why are expected number of jobs up and unemployment up... hmmm... as long as that number shows a big "7" instead of his new acceptable "8", because people don't know what a decimal is either.

Gas doubled, but down a quarter now.... so thats great.

Nov 2, 2012 7:00PM
How long do you thing gas prices will continue to fall?  Flip a coin.  We know in the Spring, Summer, and early Fall the price remain high because more people are on the roads.  The answer is when they need to make more record profits so they can pay their over paid CEO's.  They run a crooked monopoly that gets very little government oversight.  Romney, the clown wants to keep giving subsidies to the Koch Bros. and other oil behemoths.  They also need to regulate the Speculators who were deregulated by Senator Phil Gramm, a Republican.
Nov 2, 2012 6:45PM
BS!!!!!!!!!!!!!!!!!!!!!!!!!!! gas was dropping before the storm hit.  The only reason is that it is an election year!!!!!!!!!!!!!
Nov 2, 2012 6:25PM
A friend of mine is an engineer w/ GM working on Hydrogen fuel cell tech. Any existing car engine can be converted to Hydrogen. The only byproduct is water, and the cost would be equivalent to $3/gallon gasoline. So what's to stop them? Big Oil. They don't want the competition so they convince the gov't to dump tons of $ into biofuels which have no chance of being a viable option...and we pay and pay and pay.
Nov 2, 2012 6:11PM
No price drop here. Still nearly $4/gal. It did hit $4.15 a while ago, but 15 cents is only about 4 %. Not what I'd call significant. Adirondack mts. NY.
Nov 2, 2012 6:07PM
its just another made up **** reason . big oil don't have to give reasons for how they control gas prices in this country. it would be a lie anyhow. they just charge what the hell they want, when they want and if we, john doe consummer don't like it we can just kiss there **** . because they don't give one damn . and thats the truth !! 
Nov 2, 2012 5:41PM
fact is, we're all getting screwed by the oil companies.
Nov 2, 2012 5:37PM

Someone said that the President has no control over gasoline prices! 

People who love him, do though!  Same thing, and just before the Election!  Who would have guessed....?

Nov 2, 2012 5:26PM
OMG!!!! When are you going to get it through your thick skulls that presidents have NO impact on gas prices...they are arbitrarily set by independent panels and corporations. They are set for the benefit of oil cartels.
Our president and government do not set the prices. They just make sure that oil companies abide financial regulations and environmental laws. Besides that their hands are tied....yes, personal influence can make an impact on production and try to lobby in favor of lower costs, but it comes at a price, the passing of norms and legislation that allow oil companies and distributors tax incentives and writeoffs.

Nov 2, 2012 5:23PM

The President of the United States, no matter who it is, has NO control WHATSOEVER over the price of gasoline. Any of you who say or imply he does is a fool or a liar, or both.


Nov 2, 2012 5:22PM
WHERE are gas prices dropping so wildley,, it surely is around my home town they have been about the same for the last month. I fprices are dropping where are they dropping and why isnt it all over the place,,, GREED!!!!
Nov 2, 2012 5:21PM
3.09/gallon of non led gasoline in Richfield Mn yesterday. Other gas stations are around the Minneapolis/ Saint Paul area are charging  around 3.19/gallon. The demand for gasoline is at its all time low for the last ten year period. Embridge oil company recently spent 350 million reversing the flow of crude oil to Cushing Oklahoma back to the ports on the Gulf of Mexico for resale overseas. 95% of the crude oil tanker traffic is outbound and only 5% from the Mid East Countries.  Is there a shortage of crude oil or gasoline in the USA  No !  the big oil companies have been screwing the gasoline buyer as long as there are no Federal price control guidelines that force big oil to accept a agreeable industry standard of return on investment.  Our only choice is not to buy gasoline and tell the oil companies where to shove their gasoline pump nozzles
Nov 2, 2012 5:02PM

There is little gas to pump and Obama wants gas price down until after the election then $8.00 a gallon. He told us so when running for office but,few were listening. listening.

He will take off the wings after the election.

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