June 27, 2001
Gas prices should stay down
By Jefferson Wolfe
Staff Writer
Gas prices dropped recently because supply is catching up to demand, according to officials from the petroleum industry.
In late May, gasoline prices rose to nearly $2 a gallon, but in the past week, prices have fallen below $1.30.
Refineries have been running at 100 percent capacity and all needed maintenance has been completed, said Linda Casey, the senior communications specialist for Marathon-Ashland.
This means that the supply is greater than it had been earlier in the year when the prices rose drastically. The greater the inventory of fuel, the lower the price, she said.
"Stocks are building and inventories are looking good," Casey said.
As prices rose, people changed their travel plans, she said. This increased inventory further.
Many people switched to airplane flights for longer travel, said Terry Fleming, executive director of the Ohio Petroleum Council. The council represents oil refiners like Shell, BP and Exxon in front of the Ohio General Assembly and in Congress.
"The marketplace works," Fleming said. There is no conspiracy to set prices, he said.
Another factor that increased supply was that there was no "housecleaning" period this year for the refineries, he said. Generally, refineries will not produce as much product while they change over to produce a summer blend of gasoline. This year, the refineries kept producing.
Also, there were no disruptions in the pipelines anywhere, including the Midwest, Fleming said. This helped to keep the supply flowing.
While Casey would not speculate about the future of gas prices, Fleming said they should stay down for a while.
"Barring any problems, we should be in relatively stable shape for the rest of the summer," he said.
However, it is possible that the demand during holidays, such as July 4, may increase the price, Fleming said.