Better late than never, drivers say.
The national average retail price has fallen for 10 straight days and is now $3.74 per gallon. It could mark the beginning of the usual autumn decrease that was delayed this year because of refinery problems and high oil prices.
Tom Kloza, chief oil analyst at the Oil Price Information Service, predicts drops of 5 cents to 15 cents per week for the next three weeks. Over the next several weeks the national average could be at or below where it was last year.
"There's some nice relief coming," he said.
It can't come soon enough for Mary Hess, who commutes 40 miles each way from her home in Sodus Point, N.Y. to Oswego, N.Y., where she teaches English. She hasn't noticed much of a drop -- she's still paying $4.04 per gallon to fill up her Buick Century. Gasoline is among the biggest parts of her budget -- and she doesn't think it should be.
"I'm frustrated more than anything," she said.
Gasoline prices typically decline in the fall as refiners switch to cheaper fuel blends and drivers take a break from road trips. This year a series of refinery and pipeline problems sent gasoline supplies plummeting. That sent wholesale gasoline buyers and traders scrambling to purchase whatever they could, at ever higher prices, to secure supply.
"It was a cluster of random coincidental events and the buying had a panic nature to it," Kloza said.
Gasoline prices were already steep -- they were on track to set an annual record by mid-summer -- because of relatively high global crude oil prices. Brent, the type of crude most important in determining the price of gasoline, has averaged $112 per barrel this year. Global oil demand is on track to set a record this year despite economic uncertainty. And the standoff over Iran's nuclear program has raised fears that oil supplies could be disrupted if tensions escalate.
Against that backdrop, the nation's gasoline infrastructure got slammed.
In August, ruptures to pipelines that serve the Great Lakes and refinery outages in Indiana and Illinois sent gasoline prices higher in the Midwest. Then a fire at a Chevron refinery in Richmond, Calif. crippled a major contributor to California's gasoline supplies. Then Hurricane Isaac forced several Gulf Coast refineries to shut or slow down operations.
As those refineries ramped back up, California saw more trouble. A pipeline that serves Bay Area refineries closed, two refineries were offline for maintenance and an Exxon Mobil Corp. refinery in Torrance, Calif., near Los Angeles shut down because of a surprise power outage.
The national average price kept rising after Labor Day, when prices normally start to fall. It topped out for the season at $3.87 on Sept. 14 and California prices hit a record $4.67 per gallon on Oct. 7. On the East Coast, gasoline supplies dipped to a four-year low, keeping prices stubbornly high.
Then -- finally -- the market began to stabilize. The government reported Wednesday that gasoline supplies are heading back up. They had fallen for 10 of the last 11 weeks.
That led to a dramatic drop in wholesale gasoline prices in regional spot markets, according to Kloza, that will soon translate into lower prices at the pump.
California spot prices are down 30 percent over two weeks. Prices elsewhere in the country have declined between 15 percent and 27 percent. In Chicago, wholesale prices have fallen to $2.36 per gallon. That could bring retail gasoline prices in some parts of the Midwest to near $3 per gallon in the coming weeks.
The average price at the pump fell 22 cents in Ohio and 16 cents in Wisconsin in the past week. Those are two key battleground states in the presidential election, with 18 and 10 electoral votes, respectively.
The rest of the nation's drivers won't be quite so lucky. But, still, the national average could be on its way to $3.50 per gallon, or below.
- The Buzz: That stinks 10/19/12
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