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Pump Patrol: Gas Hitting 8-Month Low

October 7, 2011 by   - () Leave a Comment

More relief at the gas pump.

Gasoline is tumbling to an eight-month low as reduced U.S. growth causes pump prices to follow crude oil’s decline after lagging behind since April.

Prices may drop 20 cents to $3.19 a gallon by early November, according to the median estimate of eight analysts in a survey by Bloomberg News. Gasoline has fallen 15% from this year’s high of $3.985 on May 4, according to Heathrow, Florida-based AAA, the largest U.S. motoring organization. West Texas Intermediate oil, the most-traded U.S. crude grade, retreated about 30% over the same period.

“The worry that the economy could slip back into a recession is putting pressure on oil prices, and prices at the pump are coming off,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, an oil-industry researcher and former trader for Vitol Group, the world’s biggest independent oil trader, said in a telephone interview on Oct. 4.

Oil Prices Crude oil for November delivery traded today as low as $81.79 on the New York Mercantile Exchange, down from its 2011 peak of $113.93 reached on April 29. Pump prices have dropped to $3.39 a gallon from the high in May, according to AAA data.

“Gasoline prices are going to bottom out pretty soon and it will be supply-driven,” Sander Cohan, an analyst with Energy Security Analysis Inc. in Wakefield, Mass., a global energy-forecasting and consulting firm, said by phone on Oct. 5.

“Everybody knows demand is pretty awful and there’s shutdowns for economic reasons like Trainer and I think you will see a lot of quiet shutdowns where maintenance is dragged on for months.”

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