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Prices will likely fall more, but not as quickly, following a precipitous decline this month, Reuters reported.
The national average price for a gallon of self-serve, regular unleaded gas was $2.7785 on Oct. 24, a decline of 53 cents per gallon in the past two weeks, according to survey editor Trilby Lundberg. The survey covers pricing at more than 7,000 gas outlets.
The average price of gasoline is approximately 1 cent less than it was a year ago, $1.33 less than it was at a record peak in July, Lundberg reported.
"The drop is unprecedented," Lundberg told Reuters. "It was dictated by the crash in crude oil prices and deepened powerfully by falling U.S. gasoline demand."
On Friday, U.S. light crude for December delivery was priced at $62.65 at one point, the lowest since December 2007.
"The even weaker economy now suggests that despite a price crash on the street it is still probably not enough to inspire a strong comeback in demand any time soon," Lundberg told Reuters.
"It looks as though gasoline prices will continue down, but at a moderate pace, unless crude oil prices leap up substantially and stay there."
The national average retail for regular gasoline was $2.699 on Sunday, from a high of $4.114 in July, according to AAA.
Meanwhile, diesel prices fell 36 cents in the last two weeks, to $3.59 per gallon, Lundberg reported.
Despite the economic slowdown, diesel volumes at truckstops increased in September compared to September's volumes last year, according to a fuel survey conducted by NATSO, which represents 1,100 truckstops and travel plazas.
Diesel sales at truckstops in September increased 3.17 percent compared to a year earlier. This is the first year-over-year increase in diesel sales volumes since April, which followed a sharp 7.8-percent decline in August.
The average diesel volume for a single truckstop location was 830,480 gallons in September, compared with last year's average volume of 804,972 for the same month.
Diesel volumes experienced a strong start at the beginning of 2008, but increases did not continue through the spring and summer months. In January and February, truckstop diesel volumes increased at a rate of close to 6 percent year over year. However, as diesel prices rose, volumes began to decline, and by March sales had dropped by 2.5 percent over the previous year, NATSO reported.
Diesel sales slightly recovered in April, increasing just over 2 percent compared to the year prior, but then dropped sharply in May, falling 5.8 percent. June diesel sales fell 5.2 percent year over year and July sales dropped 4.5 percent. Diesel sales at truckstops in August declined 7.8 percent compared to August 2007.
In the petroleum industry, volume declines of greater than 3 percent are considered significant.
Amid the price and demand decline, U.S. refiners may be ratcheting back production, according to a report in the Wall Street Journal on Monday.
Gasoline output dropped for the first time in weeks, according to data from the Department of Energy. Sunoco Inc. reported last week that it is shutting down a unit used in gasoline production at one of its refineries.
"It makes no sense to be running [equipment] if they're not making any money," Daniel Katzenberg, an analyst at Oppenheimer & Co., told the Wall Street Journal.
When oil prices hit $145 a barrel in July, refiners were unable to pass on the higher cost to consumers, who balked at paying record-high prices at the pump. Refining profit margins collapsed, and many companies resorted to production cutbacks, making for some of the lowest operating rates at U.S. refineries in years.
But the refining business isn't faring much better now that oil prices are lower, because gasoline prices have dropped at a faster pace, the newspaper reported. Over the past three weeks in the Gulf Coast spot market, gasoline cost an average $1.86 a barrel less than crude oil, according to data compiled by Muse, Stancil & Co., a consulting firm specializing in the energy industry. With prices at those levels, refiners lose money with each barrel of crude oil they process into gasoline.
If that continues, gasoline inventories likely will shrink, which could eventually pressure gasoline prices higher, say analysts. So far, though, slacking production hasn't put the brake on falling prices. Since Wednesday, gasoline prices have dropped 16 cents a gallon, and by Sunday were 14 cents less than what they were at this time last year, according to AAA.
The auto club expects prices to keep falling in coming weeks, reaching $2.50 before the end of November and possibly dipping lower by the end of the year, the newspaper reported.
"We're certainly looking at further weakness," said Stephen Schork, president of the oil-and-gas firm Schork Group told the Wall Street Journal. Schork said he expects gasoline prices to go up the first quarter of next year.