By Lynn Doan, Pratish Narayanan and Lananh Nguyen
SAN FRANSISCO - Retail gasoline prices in the U.S. fell to the lowest level in a year as refineries restored production and stockpiles rose to the most in eight months, blunting criticism of President Barack Obama’s energy policies.
Regular gasoline dropped 9.5 cents, or 2.8 percent from a week earlier, to $3.254 a gallon yesterday, the lowest since Dec. 19, 2011, according to data posted on the Energy Department’s website. Crude, by comparison, was up 1.9 percent during the same one-week period in New York.
“Declining fuel prices are exactly what you need to help revive demand at the moment and help economic activity,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e- mailed response to questions. “It also means consumers spending more cash on alternatives, such as luxury goods and clothing.”
Prices at the pump jumped as high as $3.878 in September, stoking debate over Obama’s policies before this year’s U.S. presidential election. Retail costs are down 16 percent since then, with demand for gasoline lagging behind pre-recession levels, refineries coming back online after disruptions, and domestic crude production rising.
The U.S. is riding a technology known as hydraulic fracturing, or fracking, to produce an increasing share of its domestic fuel needs. Fracking, which uses pressurized water to drive gas and oil from shale rock, has helped America meet 83 percent of its energy needs in the first eight months of this year, the highest annual level since 1991, Energy Department data show. An intelligence advisory panel said last week the nation may achieve energy independence in as little as 10 years.
Gasoline supplies in the U.S. increased 2.4 percent in the week ended Dec. 7 to 217.1 million barrels, the highest since April 6, the Energy Information Administration said Dec. 12. They probably climbed another 1.9 million barrels, or 0.9 percent, to 219 million in the seven days ended Dec. 14, according to the median of seven analyst estimates before the Energy Department unit’s next report tomorrow. That would be the highest inventory level since March 30.
U.S. gasoline consumption fell 1.2 percent to 8.54 million barrels a day in the four weeks ended Dec. 7 and is down 8.1 percent from the same period in 2007, before the worst global recession since World War II, according to the department.
Consumption peaked at 9.68 million barrels a day during July 2007, according to the four-week average data from the government. Demand slipped to an 11-year low of 8.04 million during February.