Better fill 'er up now: Gas prices halt freefall
It looks like the steep slide in gasoline prices is over, at least for now.
The sharp drop in crude prices since last summer has brought down the prices of gasoline across the country, saving consumers billions of dollars when they fill up at the pump. Last month, gas prices fell to their lowest level in five years, to a national average of $2.03 a gallon, according to AAA.
The drop helped drag the government's consumer price index deep into negative territory—down 0.7 percent in January, the biggest drop since December 2008, the Labor Department said Thursday. Cheaper gasoline helped offset price increases for other goods and services from rent to restaurant meals. After factoring out volatile food and energy prices, the so-called "core" consumer inflation rate rose 0.2 percent, still tame by historical standards.
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But the impact of lower pump prices has apparently run its course. Crude prices have stabilized and pump prices have even bumped up a bit in many parts of the country. The uptick comes as refiners cope with isolated production bottlenecks and a monthlong strike by refinery workers.
The subzero deep freeze gripping much of the East Coast this month has complicated life for operators of about two-thirds of the region's refining capacity, hampering production. Among other setbacks, a partial freeze of the Delaware River snarled deliveries and interrupted the cooling systems refineries in Philadelphia, according to Reuters.
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Elsewhere in the country, thousands of refinery workers remained off the job this week as part of a monthlong strike, the industry's biggest in 35 years. Some 6,500 members of the United Steelworkers union at 12 refineries covering about a fifth of U.S. capacity began the work stoppage after talks broke down over a new three-year contract. The impasse centers on the use of non-union maintenance workers, Reuters reported.
So far, the refineries—in Texas, California, Indiana, Kentucky, Ohio, and Washington—have kept operating at near normal levels by lining up replacement workers to maintain operations.
That means the strike also hasn't yet had a major impact on gasoline supplies, in part because stockpiles are at their highest levels in years.
Refinery output also typically slows this time of year as companies schedule maintenance when demand is lowest. They also rely on stocks of gasoline blended specially for winter months before switching over to begin stockpiling summer formulations.
That could change if the strike spreads to additional locations or if refineries shut down for maintenance run into problems restarting, a not uncommon source of bottlenecks at this time of year.