September 22,2014
Oil prices are again falling this week down to $91.46 a barrel for WTI even as refineries are starting a switch to cheaper winter blends of fuel for your car and paying less for ethanol going forward. The ethanol is blended at 10 percent into your gasoline.
California gasoline prices are down to a low of $3.29 at scores of stations according to Gas Buddy although the state average is now $3.73, the lowest since February.Winter gas prices are typically lowest when demand is soft with last years average winter price falling to as low as $3.50 A consumer friendly combination including a glut in supply,reduced demand and now the calendar is helping to reduce gas prices at the pump. “September marks the start of refineries beginning their yearly transition to producing a winter blend of gasoline“, said Cynthia Harris, AAA Northern California spokesperson. “This blend is cheaper to produce because it does not need to meet the emissions requirements that are in place to prevent pollution when temperature are warmer, therefore, registering cheaper prices at the pump.”
Also helping to drive prices down as we move into October are lower wholesale ethanol prices that have dropped about 40 cents this month due to an abundant corn crop being harvested this month and falling corn prices. Will California retail gas prices get down to $3 between now and the end of the year? Gas Buddy’s Tom Kloza does not think so but they will fall more, he says. Meanwhile,AAA expects the national average to fall another 10-20 cents by the end of October.