Retail gasoline prices continued an 11-week slide by falling another two-thirds of a cent per gallon in the last two weeks but may rise by 6 cents a gallon by year-end, an oil industry analyst said Sunday.
Analyst Dan Lundberg cited several factors that could push gas prices up, including the Iraq-Iran war, rising crude oil prices, fall and winter demand for heating oil and the cost of reducing the lead content of leaded gas.
The average retail price of all grades of gas, both self serve and full serve, "has fallen for the 11th consecutive week to $1.214 (per gallon) from $1.240 last July 5," said Lundberg, who surveys some 17,000 gas stations nationwide every two weeks.
The price drop averaged two-thirds of a cent for retail gasoline but almost a full penny on the wholesale market, he said.
That indicates that retailers are continuing to recoup profit margins that they lost between January and July, when retail gas price hikes lagged behind wholesale increases, the analyst said.
The two-week reduction in self-serve gasoline prices averaged about four-fifths of a cent, twice the reduction in full-serve prices.
The latest Lundberg survey found that the retail price of self-serve regular leaded gas averaged $1.092 per gallon, down eight-tenths of a cent in the past two weeks. Self-serve regular unleaded was $1.168, also down eight-tenths of a cent, while premium unleaded was $1.296, down nearly seven-tenths of a cent.
Full-serve regular leaded was $1.315, down nearly four-tenths of a cent; regular unleaded was $1.383, also down nearly four-tenths of a cent, and premium unleaded was $1.449, down three-tenths of a cent.
Lundberg said the summer decline in gas prices confounded projections by the U.S. Environmental Protection Agency, which expected gas prices to go up because of the cost of reducing lead content in leaded gas. The EPA had ordered the reductions to begin after July 1.
The expected price increase never materialized because crude oil prices dropped during the summer as OPEC nations exceeded production quotas in an effort to grab bigger shares of the market.