- The Washington Times - Wednesday, January 5, 2005

Gasoline prices fell for the ninth consecutive week and are expected to remain below $2 per gallon for the next several weeks.

The average price for a gallon of regular gas dropped from $2.03 in October to an average $1.78 nationwide as of Monday, according to the Department of Energy. The local average also is $1.78, according to AAA Mid-Atlantic.

Prices have fallen about 20 cents since Thanksgiving but are still about 28 cents higher than a year ago.

“We have healthy gasoline stocks,” said Alan Stanley, an independent trader in Houston.

U.S. gasoline reserves have risen since late September, primarily because of high imports and increased production at domestic refineries. Motorist demand has slowed from a summer peak as colder weather has discouraged travel. Consumption typically declines further after the year-end holidays.

“It’s gonna stay at the present level for about six weeks,” said Jacob Bournazian, retail analyst for the Energy Department’s Energy Information Agency.

He said the post-Christmas period normally ushers in the year’s lowest gas prices, allowing time before gasoline producers begin ramping up production for the summer driving season.

Many refiners curtail fuel production in January and February for planned work, known as “turnarounds,” before boosting oil processing to meet the summer’s increased demand. The slowdown won’t affect motorists because the United States has higher-than-normal supplies of gasoline, traders said.

“We ought to be able to make it through this turnaround season without any trouble,” Mr. Stanley said.

In the District, consumers are paying on average $1.88 per gallon — 12 cents per gallon less than last month’s prices but still up from $1.57 a year ago.

John Townsend, director of public and government relations for AAA Mid-Atlantic, said consumers would have to drive about 150 miles south — to the Richmond area — to find prices comparable to last year’s.

Nationally, regular gas cost $1.93 per gallon last month and $1.50 a year ago, according to AAA. The higher prices in the District are mainly caused by the higher rental costs that retailers pay in the city, Mr. Bournazian said.

Oil prices started spiking in September because of a number of worries: hurricane damage to the Gulf of Mexico refineries and pipelines, worker strikes in oil-rich Nigeria, bombing of Iraqi oil pipelines, the Yukos oil crisis and general instability in the Middle East.

At the Exxon station at New York Avenue and Bladensburg Road in Northeast, regular gas ran $1.88 per gallon yesterday — an improvement, said D.C. resident Frances Ward, but not good enough.

“It’s still too high in the District,” she said while refilling her minivan. “That’s why I usually go out to Virginia, or somewhere like Waldorf, where it’s cheaper. I only buy gas in the District when I’m extremely desperate, like right now.”

But Cleopha Maze, another D.C. resident who stopped at the station yesterday afternoon, said he wasn’t waiting for any magic solution.

“Look, I just drive. And when it’s low, I just fill it up. I don’t need to worry about prices,” he said.

Because the oil market is dealing with so many variables, it’s difficult to predict the market over the next several months, energy officials say.

Mr. Bournazian said he expects prices to remain stable until March. He said when crude oil prices started rising above $50 per barrel in October, the oil industry began to stockpile. So the oil industry should have a sufficient cushion to protect it against any volatile external events.

But even Mr. Bournazian admits that his optimistic forecast is subject to change.

“How long it lasts is anyone’s guess,” he said.

This story is based in part on wire service reports.

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