After a season of soaring gas prices, two bits of relief are just around the corner.
The cost of gasoline at the pump is expected to drop by as much as 21 cents a gallon this summer as refineries across the nation pump up their output of motor fuel.
Contracts for delivery of unleaded gasoline at New York Harbor show wholesale prices falling to 85 cents a gallon for September from $1.06 per gallon for May, according to projections at the close of commodity trading on Friday.
Generally, the price at the pump follows the wholesale price. Motorists will pay less "unless a major refinery goes out," according to Anthony Grisanti of GRZ Inc., a gasoline trader at the New York Mercantile Exchange.
The price drop will be felt relatively soon. There is a time lag of about a week between gasoline pricing on the Mercantile Exchange and shipments to gas stations.
In the next few weeks, drivers will see some price relief from the highs of early May, said Grisanti. But even after the predicted price drop, motorists will still pay about 15 cents more per gallon of gas than they did last summer.
The main reason for the gas price spikes in March was that most of the nation's 157 refineries were busy producing heating oil to meet stiff demand from homeowners during the winter, according to the American Petroleum Institute.
At the beginning of the winter, the nation was caught short with low heating oil inventories, and had to use available refinery capacity to make up the shortfall. When winter ended, gasoline producers were then caught with low inventories of motor fuel.
"We don't have a shortage of crude oil," said Grisanti. "What we have is a shortage of refining capacity."