Energy Information Administration figures show U.S. petroleum products prices are at their lowest point since 1987.
Calvin Kent, EIA predicted declines in crude and product prices will continue through the first few months of 1992 "and will have a positive influence on recovery of the economy."
EIA said aside from the successful conclusion of Operation Desert Storm, the major factor contributing to price declines in 1991 was a substantial drop in crude prices. The spot price of West Texas intermediate crude fell about $5/bbl, equal to 12cts/gal, during November and December 1991.
It said, "While the competitive world market is passing these savings through to the prices of refined products, retail prices in some areas of the U.S. do not fully reflect the most recent decline in crude prices.
"There has been a steep decline since December 1990, when prices were temporarily higher due to the Persian Gulf crisis. December 1991 average prices fell 25.1% for retail motor gasoline, 22.4% for total retail distillate fuel oil (residential heating oil and diesel fuel), and 44.3% for kerosine jet fuel, after adjusting for inflation."
Prices also are lower when compared with December 1987, the most recent comparable yearend market prior to the Persian Gulf crisis.
U.S. retail motor gasoline prices averaged 3.4% lower in December 1991 in real terms. Retail distillate prices were about 1% less, while kerojet prices were as much as 22% lower.
Kent said ample supplies and sluggish demand will continue during the first few months of 1992, except that heating oil may experience a seasonal increase.
EIA said many factors in world petroleum markets suggest crude oil prices may decline even more, thereby reducing product prices further.
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