Aug. 25 (Bloomberg) -- The cheapest crude oil since January has refiners producing fuel at record rates, helping lower the cost of gasoline at pumps across the country.
The average price for regular gasoline at U.S. pumps dropped 4.21 cents in the two weeks ended Aug. 22 to $3.4785 a gallon, according to Lundberg Survey Inc. The average is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. Prices are 8.01 cents lower than a year ago, the survey showed.
Retail prices dropped as West Texas Intermediate crude futures fell below $94 a barrel. U.S. refiners are processing the most petroleum for this time of year in records dating back to 1989.
“It’s crude oil at work,” Trilby Lundberg, the president of Lundberg Survey, said in a telephone interview yesterday. “The down factors outweighed the up factors. One of the many factors include robust U.S. oil production.”
The highest price for gasoline in the lower 48 states among the markets surveyed was in San Francisco, at $3.92 a gallon, Lundberg said. The lowest price was in Jackson, Mississippi, where customers paid an average $3.11 a gallon. Regular gasoline averaged $3.66 a gallon on Long Island, New York, and $3.79 in Los Angeles.
West Texas Intermediate crude, the U.S. benchmark priced in Cushing, Oklahoma, fell $4, or 4.1 percent, to $93.65 a barrel on the New York Mercantile Exchange in the two weeks to Aug. 22. It’s the lowest settlement since Jan. 14.
Refineries processed 16.42 million barrels a day in the week ended Aug. 15, the highest level for mid-August in Energy Information Administration records dating back to 1989. Refinery inputs reached a record 16.63 million barrels a day the week of July 11.
On the Gulf Coast, home to more than half of the nation’s refining capacity, rates rose to 8.74 million barrels a day the week of Aug. 15, the highest level on record.
Crude inventories nationwide fell 4.47 million barrels to 362.5 million, the lowest level since Feb. 21.
Plants are taking advantage of the U.S. shale boom, which has raised oil production 64 percent in the past five years. The increased output has pushed the settlement price of U.S. benchmark WTI futures below European Brent every day since Aug. 17, 2010.
Gasoline futures on the Nymex slipped 1.53 cents, or 0.6 percent, to $2.7384 a gallon in the two weeks ended Aug. 22.
Gasoline stockpiles grew 585,000 barrels to 213.3 million, EIA data show. Demand during the four weeks ended Aug. 1 was 9.016 million barrels a day, 2 percent below a year earlier.
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