Price caps to go down by 5 cents next week
Analysts say warm weather is keeping prices on a decline
With forecasters calling for mild winter weather in much of the country, Hawaii motorists can expect another dip in the state's price caps on wholesale gasoline after they ring in 2006.
Price caps for next week are projected to drop about 5 cents, according to preliminary estimates by the Star-Bulletin.
The expected decrease comes on top of a 3-cent drop in price caps for this week.
If wholesalers charge up to the maximum allowed and dealers add a markup of 12 cents, regular unleaded on Oahu is projected to cost about $2.51 a gallon, the cheapest in the state.
The most expensive gas is forecast for Lanai at $2.87 a gallon, while the statewide average is projected to be about $2.67 a gallon.
Yesterday's statewide average of $2.72 a gallon was 53 cents above the national average, according to AAA's Fuel Gauge Report, which is based on credit card transactions from the previous day.
Hawaii's price caps are published on Wednesdays by the Public Utilities Commission and based on an average of spot wholesale prices in the Gulf Coast, New York and Los Angeles.
Those prices track closely to the price of crude oil, which fell as much as 1.4 percent in New York on forecasts for milder weather in the United States and on expectations that heating-fuel stockpiles, including natural gas, are adequate to meet winter demand.
Warmer-than-normal weather is forecast for most parts of the country, private forecaster Earth Satellite said in its six-to-10-day outlook report on Dec. 23. Gas supplies are 2.3 percent higher than their five-year average, based on Energy Department data.
Crude oil for February delivery fell as much as 83 cents, to $57.60 a barrel, in electronic trading on the New York Mercantile Exchange yesterday.
"Natural gas and the weather are driving the market," said Steve Taylor, an oil trader at New West Petroleum Inc. in Sacramento, Calif. "Stockpiles seem to be all right. It all seems to be in pretty good shape."
Star-Bulletin estimates are based on a four-day average of prices listed by Bloomberg News Service, which vary slightly from the benchmarks used by the PUC in setting the weekly price caps.
Actual caps are based on a five-day average of benchmarks set by the Oil Price Information Service and have varied from the Star-Bulletin projections by as little as a fraction of a cent to as much as 5 cents.
Bloomberg News Service contributed to this report.