Price at pumps could drop slightly
Spot prices indicate an expected dip of 1 cent per gallon starting next week
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ISLAND gas prices could take another slight dip next week as spot prices for wholesale gasoline in the Gulf Coast and Los Angeles have reached their lowest points since summer.
Spot prices in New York, the third mainland market to which Hawaii's wholesale gas price cap is tied, also have decreased since last week.
The lower spot prices have tracked crude oil prices, which have fallen as unseasonably warm temperatures across much of the mainland have eased worries about greater fuel demand this winter.
Based on the wholesale spot prices, Hawaii's price caps for next week are projected to drop by 1 cent, according to preliminary Star-Bulletin calculations.
A decline would mark eight straight times that price caps have been set lower in successive weeks. Since Oct. 17 the maximum price at which wholesale gas can be sold in Hawaii has dropped 90 cents.
Under the new caps, Hawaii's statewide average for regular could fall to $2.61 a gallon, which would be 7 cents below the average reported yesterday by AAA's Fuel Gauge Report.
Although Hawaii's average has been the highest in the country since September, the islands are on the verge of losing that distinction. Prices in Alaska have crept up in recent weeks, topping out at $2.61 a gallon yesterday, the auto club said.
The national average for regular was $2.15, according to AAA.
Oil and gas prices have been largely linked to weather patterns in the Northeast, the world's biggest market for heating oil. Energy prices crept upward last week as meteorologists tracked a winter storm that was expected to catapult heating oil demand in the region.
But AccuWeather.com forecast rising temperatures yesterday, calming fears of heating oil shortages. Those concerns were further eased by last week's Energy Department reports that U.S. energy stockpiles were expanding as demand held steady.
However, forecasters warned that another cold snap could be on its way to the Northeast. A snowstorm battering some Western and Midwestern states is projected to head east and send temperatures plunging by the end of this week, according to AccuWeather.com.
Experts warned oil prices could spike in the event of a cold blast in the Northeast or other major fuel-consuming regions in the Northern Hemisphere and said the market was monitoring the weather closely.
Analysts also continue to have concerns over the recovery pace at Gulf Coast oil and gas facilities hit by Hurricanes Katrina and Rita, which crippled U.S. refining capacity and sparked anxiety about shortages this winter.
The Star-Bulletin's price cap estimate is based on a four-day average of spot wholesale prices listed by Bloomberg News Service for the three target markets.
Price caps calculated by the Public Utilities Commission are posted on Wednesdays using an average of spot prices from the five previous business days listed by the Oil Price Information Service. The Star-Bulletin's estimates have varied from the PUC's actual price cap by as little as a fraction of a cent and by as much as 5 cents.
The Associated Press contributed to this report.