Pipeline repair sparks crude oil price decline

By Johnny Jackson


Average gas prices nationwide are inching downward, following an unexpected rise in prices earlier this month, according to the AAA Auto Club South.

AAA's Daily Fuel Gauge Report revealed that average prices fell by a penny Sunday, heading into Monday. The reduction followed a week in which prices climbed by a nickel per gallon, although prices typically begin to decline this time of year.

Data from the report indicated that Sunday's national average of $2.73 per gallon for regular unleaded gasoline was one of the highest price marks experienced since the start of the 2010 summer driving season in May.

AAA Auto Club South reported last week that the shut down of a major pipeline owned by Enbridge Energy Partners LP, which is based in Houston, Texas, was a cause of the price hike. With the shutdown, inventories declined and crude oil and gasoline prices rose.

However, last week, after the Enbridge pipeline resumed operating on Friday and supplying oil to refineries in the Midwest, oil prces began to drop, according to Angie LaPlant, director of AAA public relations.

"With regard to the re-start of Line 6A, Enbridge successfully returned Line 6A [a 670,000 barrel-per-day line] to normal operations this morning at 07:50 MST," said Enbridge Senior Vice President Art Meyer, in a written statement on Friday.

LaPlant said the pipeline took less time than once thought to repair, lessening the affects of crude oil supply interruption. She noted that crude oil closed last Friday, Sept. 17, at $73.64 per barrel on the New York Mercantile Exchange, down by $2.81 from the week before.

"Oil prices continue to fluctuate between $70 and $80 a barrel and, for the most part, this price range has kept retail gas prices affordable for many consumers," said LaPlant. "Consumers will see a decrease in retail gas prices this week, and after recent announcements about the economy, it is very possible the price of crude oil may decline further next week."