Fuel prices at U.S. gas stations lower for second straight week

Oct. 23 (UPI) -- Fuel prices at service stations across the United States as of Monday were about four cents cheaper than the previous week, coming in with a national average of about $2.85 per gallon.

Even with gas prices continuing to drop, the AAA repeated warnings to West Coast drivers, who already pay the most to refill tanks, that they remain vulnerable to potential price hikes.

"Reduced refinery runs, due to peak maintenance season, have contributed to stable gasoline inventories amid lower demand," the AAA said in its weekly report.

Drivers in 41 states saw weekly price declines, yet the cost of refueling tanks remains 39 cents higher than the same time a year ago and much higher compared with 2015 and 2016.

The West Coast region, where gasoline prices are highest, could see spikes.

"Stocks are approximately 1.5 million barrels lower than they were at this time last year, which could cause prices to spike if there is a supply challenge in the region this week," the AAA said. Problems earlier this month with pipelines feeding energy to refineries led to reduced gasoline production.

The Mid-Atlantic and Northeast regions saw big price declines and the least expensive prices.

The lowest gasoline price at fuel stations nationwide were in Delaware, at $2.56 per gallon, and Ohio, at $2.57 per gallon, while the highest prices were Hawaii at $3.90 per gallon and California at $3.82 per gallon.

Gas buddy, which provides a different national average calculation but also reported a decline, reported that it calculated a 4.7 cents per gallon drop to $2.83 per gallon, adding that "the average price of diesel saw slight relief as well," dropping just short of a penny to an average of $3.28 per gallon.

"Much of the country continues to enjoy broad decreases in gas prices as oil prices drop to $69 per barrel," said Patrick DeHaan, head of petroleum analysis at GasBuddy. "In fact, with the exception of the West Coast where an earlier natural gas pipeline shutdown caused prices to go up, nearly every state saw prices move lower."

He was referring to WTI crude oil future prices for front-month delivery, which reached $76.41 per barrel on October 3, but have since seen a fast drop and were trading Tuesday morning at $68.18 per barrel.

Gasoline sold in the United States is mainly a combination of Reformulated Gasoline Blendstock for Oxygen Blending, or RBOB, with ethanol, in varying proportions. In California, California Reformulated Gasoline Blendstock for Oxygenate Blending, or CBOB, is used instead of RBOB to meet that state's stricter emission goals -- which results in higher costs.

Ethanol futures for November delivery settled Monday at $1.26 per gallon, while RBOB settled at nearly $1.88 per gallon. CBOB futures for October delivery traded Monday at just over $2 per gallon.