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
281Comments
Nov 5, 2012 5:23PM
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Price Gouging,in the storm area ? Imagine that !  Just remember the stations that did gouge. and tell them to drink their product with supplies become plentiful. Thats what we did down here, after Katrina.  Yes i am from the Great State of New Jersey.  Now living on the Gulf Coast. 
Nov 5, 2012 5:23PM
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gas prices are falling because the econemy has hit  another stall just like it does every time the gas companies gouge americans at the pumps. we stop spending anywhere when gas companies get greedy. literaly if every one would stop using money to buy anything when gas prices are at rip off levels which they are right now, the government would get the message and stop the thives from ripping us off in the first place.  people say it is supply and demand, not the case if we dont use gas they say it is because of low demand when we do use gas they say it is because of demand. or they blame the weather,or iran, or iraq, or any reason to raise prices. I say please every american lets shut down the econemy together as one unit. Stop buying any thing at all.

Nov 5, 2012 5:22PM
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Some people complain about everything including when gas prices go up and again when gas prices go down.  Apparently there are just some people that are always unhappy - absolutley no matter what.  Good grief!
Nov 5, 2012 5:18PM
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half of the problem with fuel prices is the gastapo tactics of the EPA

they are creating ficticious issues and shuting down or causing the shut down of refineries nationwide. the price of oil is under $100.00 a barrel but the price of gas is over $150.00 a barrel

  dispose of the EPA and we  will solve the price issue

Nov 5, 2012 5:16PM
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Apparently the oil barons want Obama to be re-elected, otherwise they would have raised gas prices to screw him.  Watch the prices go up over 25 cents per gallon by the end of this week and over a dolllar a gallon by the end of the year.
Nov 5, 2012 5:12PM
Nov 5, 2012 5:10PM
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SOme poeple are complaining that the price went up 30% in some areas of NJ/NY....and the govt. limited raise to 10%...what a crock....You need to ask yourself....if you cant get gas from your terminal/refineres....then it has to be hauled in and the trucker know this....so they raise the rates and the fuel comes from OHIO or somewhere not affected by the storm....It he 30% increase was to cover his increased cost then so be it.....don't blame the gas companies....anyway do you want the gas or not. if you buy it stop complaining or go down the road....oh thats right....that gas station doesn't have gas or didn't put in a generator so he could pump his gas....

Nov 5, 2012 5:02PM
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better fill up all the jugs you can find now because after the election it's going back up!
Nov 5, 2012 4:59PM
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Like I said, buy a smaller car.You don't use them big trucks for anything but showing off.
Nov 5, 2012 4:54PM
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the closer the election the faster the prices are falling, we have seen it drop almost 1 dollar over 2 months. , no one can get re-elected with 4 dollar gas. of course it will be bamed on SANDY when price rise after the election. when refineries in washington state were down it didn't effect the whole nation.
Nov 5, 2012 4:52PM
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This is not accurate for our eegion, prices hve stayed almost unchanged.
Nov 5, 2012 4:51PM
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The main reason the price if falling is the economy is slowing World wide and demand has slackened.  Prices will go up only when the demand starts up again, and who gets elected will determine when that will start.  Romney and the economy will improve, Obama and we will bounce along like we have been.  People don't work, they don't have money, they can't buy goods, and they don't buy gas.
Nov 5, 2012 4:51PM
Nov 5, 2012 4:49PM
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Just want to add that gas prices are NOT dropping in central Iowa.  Still way above average here.
Nov 5, 2012 4:48PM
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Ya, The presidents don't control the oil prices. The rich republicans that own the oil companys do. They are always going to have an excuse. Did you know they are  shipping gas oversea's as this is going on,and saying there is a shortage.
Nov 5, 2012 4:48PM
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back in the 70's in los angeles it was mentioned gasoline was a byproduct and if we didn't burn it in our engines there would be no place to dump it, also we saw freighter after freighter sitting low in the san pedro harbor not being allowed to unload to keep prices going up and long lines.
Nov 5, 2012 4:43PM
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the closer the election the faster prices have fallen, how fast will prices go up after the election will be blamed on SANDY, when refineries were shut down in washington state no other states were effected, so why are all states seeing such a decline? and why will prices in washington be effected from the east coast?
Nov 5, 2012 4:41PM
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Well, the demand is down.  Why?  Because people are spending less since the economy is still struggling.  People have used up their savings and are trying to save for the holidays to have some money to spend.  Also, the oil companies want obama to win?  Why?  Because if Romney is elected he will opt for more drilling and exploration.  This will put more oil on the market and cause the price to go down.  If obama is reelected, he will opt for no drilling, causing the price to go up and larger profits.  The oil companies are taking a smaller hit now on profits, knowing later that they will get larger profits later.
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Take this Mitt..........Gas prices coming down..........economy growing.........take that LOSER
Nov 5, 2012 4:38PM
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This article is BS. I don't see prices dropping here in NJ, and once the electric is back, I doubt NJ gas stations will drop the prices to match the national trend.
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