U.S. service stations see lowest gas prices since April

Nov. 6 (UPI) -- Average fuel prices in U.S. service stations as of Monday fell six cents on-week to $2.76 per gallon, a six-month low, but are still nearly a quarter of a dollar higher than last year, AAA reported.

"Gas prices are likely to continue to fall as much as ten cents in the near-term," said Jeanette Cassellano, an AAA official, in a weekly report. A week earlier, AAA had forecasted a price increase this week.

The biggest declines were in Ohio, with a 12 cent per gallon drop. Michigan and Indiana saw a 9 cent per gallon decline. The least expensive gasoline was in Delaware, at $2.44 per gallon. Drivers in U.S. north-central states are seeing lower prices "as regional refinery maintenance season begins to wrap-up," said the AAA.

In the mid-Atlantic, prices have gone down despite the largest draw in gasoline in the country and refineries operating at a 76 percent utilization rate, AAA said.

In the South and Southeast, in contrast, refinery utilization rates are 97 percent and "stock levels are the largest of any region in the country." Oklahoma led declines with an 8 cents per gallon drop.

GasBuddy, which also tracks fuel prices at service stations, estimated a U.S. average of $2.73 per gallon, and sees more declines ahead.

"We should see prices move lower yet again -- but this behavior is par for the course every autumn," GasBuddy's analyst Patrick de Haan said in a press release. Last week, GasBuddy had accurately projected a fuel price decline for this week, citing a crude oil future prices plunge during October. Prices of oil derived products depend on crude oil.

Fuel consumed in most states in the United States are a combination of RBOB, or Reformulated Gasoline Blendstock for Oxygen Blending, mixed with ethanol.

Most U.S. vehicles run with mixes that contain about 10 percent ethanol. Only flex-fuel autos can use a much higher ethanol content, as alcohol can be corrosive to some vehicle parts when they are not prepared to use it. Most of the ethanol in the U.S. is alcohol made from corn. Fuel mixes containing high content of ethanol, often 85 percent, are currently less expensive as ethanol is now cheaper than naphtha.

RBOB is the naphtha produced by refineries from crude oil, commonly known as gasoline. Future prices for both ethanol and RBOB can also help identify trends.

RBOB futures for December delivery were quoted in the CME exchange at $1.69 per gallon just before 8.00 a.m. EST, down from a quote of $1.81 per gallon a week earlier. The unit of trading is 42,000 gallons.

Ethanol futures for December delivery were quoted Tuesday just after 8.00 a.m. EST at $1.31 per gallon. A week earlier that contract traded lower at $1.28 per gallon. The ethanol futures contract is for 29,000 gallons of ethanol.

California, which has the highest prices of fuel in the country, uses a more expensive mix known as CBOB that helps it meet stricter regulations. CBOB for front-month delivery was quoted Tuesday in Chicago as of 8:07 a.m. at $2.02 per gallon, up from $2.01 a week earlier.

AAA said Tuesday that California has one the highest costs for fuel prices at $3.75 per gallon, only lower than Hawaii at $3.91 per gallon.