The average monthly retail price for regular unleaded motor gasoline fell 11 cents per gallon from September to December. However, with crude oil prices increasing from their December lows combined with lower than normal stock levels, EIA projects that prices at the pump will rise modestly as the 2001 driving season begins in the spring. Gasoline inventories going into the driving season are projected to be about the same or even less than last year. Relatively low gasoline inventories could set the stage for regional supply problems that once again could bring about significant price volatility in gasoline markets. The prospect of regional supply problems is increased by the differing regional gasoline product requirements, arising from Federal and State air quality programs, which limit the distribution system's flexibility.
Regional problems can also arise from temporary or permanent losses of refining capacity.
However, it is expected that with a year's experience behind them, the refining industry's ability to make the new type of gasoline initially required last summer should be improved, thus mitigating any problems related to this latest change in gasoline specifications. Distillate Fuel . The heating season of October through March is now nearing its end, so it is likely that retail heating oil prices have seen their seasonal peak provided no late seasonal surge in heating demand occurs. Warm spells in January and declining crude oil prices in December and January have helped ease heating oil prices. Because of the relatively warm weather in the Northeast during the last half of January and the extremely high level of distillate fuel imports and refinery production so far in 2001, heating oil stock levels have not weakened over the past month or two as would normally occur.