Las Vegans enjoying fuel priced at under $3 a gallon

As he pumped regular gasoline Friday at $2.99 per gallon, a price seemingly consigned to nostalgia just three months ago, Carlos Lovato was working on a mental shopping list for his newfound pocket money.

With a 63-mile-a-day commute, he calculates that he now spends about $60-70 a month less on gasoline than in October, when prices most recently peaked.

“The savings can go to my family instead of putting it in gas,” said Lovato, who lives in Las Vegas and works at the Molycorp mine just south of Primm. “If gas stays like this, we can take some camping trips.”

In recent days, a handful of Las Vegas stations have cut their prices below $3 a gallon, crashing through that level for the first time in two years. In October, according to surveys conducted by GasBuddy.com, the average shot up to $3.82 after hitting $3.95 in April, the highest since the $4-plus records set in 2008.

Analysts predict the good news will continue, at least for a few weeks.

“There are weak spots in the Rockies and the West Coast,” said Tom Kloza, the chief analyst at the Oil Price Information Service in Gaithersburg, Md. “It has less to do with the price of crude and more to do with very weak demand.”

With ample supplies, refineries have incentives to discount to keep sales moving, added Peter Krueger, state executive for the Nevada Petroleum Marketers & Convenience Store Association.

“I think we are good to go for the next 90 to 120 days, barring the end of the world,” he said. “But I can’t believe we will get much below $2.85.”

Others, however, think February will be another disheartening month, just as it has for the past two years when prices escalated as driving picked up. Crude oil prices dropped in the wake of concerns that Washington, D.C., would go over the “fiscal cliff,” causing an economic slowdown or contraction, GasBuddy senior petroleum analyst Patrick DeHaan said. Since the “cliff” was averted at the last minute, crude prices have headed up.

“A lot of what powers gas prices is the sentiment about where the economy is going,” DeHaan said.

Kloza picked Groundhog Day, Feb. 2, as the approximate point where gasoline prices probably would reverse the current direction. That would fit the seasonal trends that have existed for several years.

“If there is a road to $2.50 a gallon in Nevada, it is probably a road paved with economic woes,” he said.

As a consolation, Las Vegas pump prices probably will remain relatively cheap.

GasBuddy.com, which relies on volunteers to report prices at stations, now calculates the local average for regular at $3.10 a gallon compared with $3.27 nationwide.

A pipeline owned by Sinclair Oil and Hollyfrontier Corp. that opened last year connects Las Vegas with refineries in Salt Lake City, which has long accessed crude oil priced lower than the wider market and in California. California has been Nevada’s primary gasoline source.

At least for now, local drivers will enjoy seeing their bills go down.

“It’s great,” said Michael Tumpkin of Las Vegas, as he filled the tank at the Arco AM PM station at 6102 W. Flamingo Road. “But if it goes down this low, then it should go down 50 cents more.”

Because of the frequent price fluctuations, he continued, “I don’t trust the oil industry.”

“This is a really low price,” Judy Wiener of Las Vegas said. “I love it. I think it shows the economy is getting much better overall.”

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or 702-387-5290.