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 2, 2012 5:41PM
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fact is, we're all getting screwed by the oil companies.
Nov 2, 2012 6:45PM
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BS!!!!!!!!!!!!!!!!!!!!!!!!!!! gas was dropping before the storm hit.  The only reason is that it is an election year!!!!!!!!!!!!!
Nov 2, 2012 4:29PM
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Gas prices have been artificialy high for the last 6 months and still are, disconnected even from the wall st barrel price which should place gas around $3.00 at the pump when most are $3.60-$4 range. Couple this the approaching election and months(not one week are you kidding me?) of repairs and rebuilding on the east coast you can expect prices should drop quite a bit more... 

 

Nov 2, 2012 4:48PM
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I`m sure it has something to do with the electon. If you look back a few years when Bush was in office just before the election it was under $2.00. Gas is a big issue, You are not going to get re elected making people pay $4.00 a gallon. That is very un popular.

Nov 2, 2012 5:21PM
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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 6:25PM
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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 8:59PM
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lets see what the price of gas goes to after the election.
Nov 2, 2012 6:07PM
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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 5:22PM
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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 10:07PM
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At the last debate the President said low gas prices in 2008 were because the economy was so bad.  Does the fact the prices are falling mean the economy is getting weaker?
Nov 2, 2012 11:16PM
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Wake me up when it gets to two dollars per gallon, otherwise who cares.
Nov 2, 2012 7:54PM
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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 7:29PM
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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 5:02PM
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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.

Nov 2, 2012 4:12PM
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Not dropping here in metro Detroit. In fact, prices are UP since last week. Nice try, MSN.....

Nov 2, 2012 9:21PM
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Tue 11/2/12

Falling Gas Prices My **** !   I can't remember the last time Gas was below $4.00 per gallon here in Alaska.    Filled Up 2 days ago   $4.55 per gallon regular Gas.

Nov 2, 2012 7:00PM
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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 6:11PM
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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 7:41PM
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falling, where it went up 3 cents here today
Nov 2, 2012 4:51PM
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What does President Obam's preacher have to do with the price of gasoline?  

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