Gas Prices Fall In Oklahoma

OKLAHOMA CITY (AP) _ Oklahoma's statewide average gasoline price has fallen more than 38 cents a gallon during the last 3 1/2 weeks, with analysts attributing the drop to improved refining output in

Wednesday, August 8th 2007, 2:17 pm

By: News On 6

OKLAHOMA CITY (AP) _ Oklahoma's statewide average gasoline price has fallen more than 38 cents a gallon during the last 3 1/2 weeks, with analysts attributing the drop to improved refining output in the region and lower demand as the traditional vacation season ends.

AAA Oklahoma reported Wednesday the average price of a gallon of self-serve gasoline in the state is $2.80, after reaching $3.18 on July 14. The state's average price peaked at $3.29 on May 22, shortly before Memorial Day.

There remains a significant difference between the average prices of gasoline in the state's two largest cities. Oklahoma City motorists are paying an average of $2.69 per gallon, while their Tulsa counterparts are paying an average of $2.84, according to AAA figures.

The nationwide average is at $2.82 per gallon, down 4.6 cents from a week ago and 21 cents below the $3.03 average recorded three weeks ago. It's the lowest national average since April 13.

Tom Kloza, the publisher and chief oil analyst at the Oil Price Information Service, said on his blog Wednesday that nationwide prices for unleaded regular have dropped an average of 40 cents a gallon during the past 75 days. He said that means ``the difference between filling that 20-gallon tank on Memorial Day versus loading up in mid-August is commonly as much as $15.''

Among Oklahoma's border states, Texas, Arkansas and Missouri have lower average gas prices, while prices in Colorado, Kansas and New Mexico are higher.

Steve Agee, the chairman of the Oklahoma Energy Resources Board and owner of Oklahoma City-based Agee Energy, said that as children return to school as August progresses, ``typically demand for gasoline decreases ... because people start driving a little bit less.''

Another key reason for the recent drop in Oklahoma gasoline prices is the partial resolution of supply chain issues caused by refinery problems in the region, Agee said.

A refinery owned by Coffeyville Resources in Coffeyville, Kan., which analysts have said produced about 108,000 barrels per day of gasoline, shut down June 30 after flooding in the region and is not expected to resume production until mid-September.

That, combined with problems at other refineries in Oklahoma and Indiana, caused a disruption in supply that resulted in a market oddity in mid-July, when Oklahoma and other regional states had higher gas prices than coastal states, where gas prices typically are higher.

``Our regional cost was higher (in mid-July) because our supplies were restricted,'' Agee said. ``Some of the (refinery issues) have been alleviated now. We're getting additional stocks and supplies of gas to our markets.''

AAA Oklahoma spokesman Chuck Mai said the volatility seen in the stock market in recent days ``seems to have spread to the futures market for oil and wholesale gasoline this week.'' He said that oil is trading on the New York Mercantile Exchange ``in the $72 to $73 range'' after going above $78 last week.

In its weekly inventory report released Wednesday, the U.S. Energy Department's Energy Information Administration said refinery utilization fell 2.3 percentage points to 91.3 percent in the week that ended Friday, after most analysts had projected a slight increase.

According to the report, oil inventories fell by 4.1 million barrels since last week, more than twice what analysts had expected. Gasoline inventories fell 1.7 million barrels, when analysts had expected a 1 million barrel increase.