NEW YORK (AP) — Gasoline prices are on a summer slide, giving U.S. drivers a break as they set out for the beach and other vacation spots for the Fourth of July.
The national average for a gallon has fallen for 21 days straight and is now below $3.50 for the first time since February. The reason: Oil prices have been relatively stable, and refineries are turning out more gasoline after completing springtime maintenance.
The drop may be interrupted temporarily because oil prices spiked Wednesday on fears that the turmoil in Egypt would disrupt the flow of crude in the Mideast. Analysts, however, don't expect a sharp increase at the pump, because global oil supplies are ample and U.S. refineries are producing plenty of gas.
The national average price of a gallon is $3.48, according to AAA, OPIS and Wright Express. That is 16 cents below its post-Memorial Day high of $3.64 on June 10.
For much of the nation, the slide has been gradual. But for some drivers, especially in the Midwest, it has been a roller-coaster ride. Prices shot up there early last month because of refinery maintenance work and a fire, then plunged after the refineries ramped back up.
Patrick Francis, who owns a used-car lot in Toledo, Ohio, filled up his Volvo for $2.89 per gallon over the weekend as he was preparing for a family trip to Hilton Head, N.C. Just three weeks earlier, he was paying more than $4.
"I feel blessed," he said. "It's like a miracle."
Tom Kloza, chief oil analyst at GasBuddy.com, predicted the national average will hover between $3.30 and $3.60 for the rest of the summer. That would be somewhat lower than the last two summers, when gasoline prices spent part of the season above $3.70 per gallon.
Oil prices shot up Wednesday above $101 per barrel, the highest since May 2012, as the crisis in Egypt deepened. Egypt is not a major oil producer but controls the Suez Canal, a major shipping lane for Middle Eastern crude.
While analysts are not expecting a resulting surge in gasoline prices, they could rise quickly if the Mideast unrest does disrupt oil supplies. Gas could also climb if a hurricane threatens the heart of the refining industry along the Gulf Coast.
This year's early summer decline, while welcome, is smaller than the seasonal drops of the last two years, when gas prices also fell between Memorial Day and Independence Day. Gasoline is 15 cents more expensive than it was last year at this time.
Gas prices typically rise in late winter or early spring when refineries perform maintenance and switch from making winter gasoline blends to the more complex summer blends required for clean-air rules. When the nation's refineries aren't operating at full strength, supplies drop and prices rise. Once the maintenance is done, output rises and prices fall.
"When refineries go down it can create immediate and severe havoc," Kloza said. "It's a very shallow distribution system, quick to fill and quick to empty."
That's what happened in the Midwest earlier this year. A fire broke out at a Marathon refinery in Detroit in late April while maintenance was underway at an Exxon Mobil refinery in Joliet, Ill., and a BP refinery in Whiting, Ind.
Prices soared above $4 per gallon in parts of Ohio, Michigan, Wisconsin and Indiana. As the refineries recovered, prices quickly fell. By July 3, Ohio prices were $3.33.
Regional spikes and plunges are likely to happen more often in coming years. The number of U.S. refineries has shrunk by a quarter since 1993 to 143, but the nation's refining capacity has grown 18 percent since then. The remaining refineries are getting bigger, so if one goes down, it's a bigger shock to the system.
Some U.S. drivers will be paying a little more because of higher gasoline taxes that went into effect July 1. California and Maryland taxes rose 3.5 cents per gallon, Connecticut's climbed 4 cents, and Wyoming's 10 cents. Virginia drivers are getting a break — gas taxes there are falling 6.4 cents.
Gasoline taxes account for the biggest difference in pump prices for U.S. drivers. Local, state and federal taxes vary from nearly 70 cents per gallon in New York, California and Hawaii to half that in Missouri, New Jersey, Oklahoma, South Carolina and Virginia, according to the American Petroleum Institute, the industry's chief lobbying group.
Adil Mehta of Chatsworth, Calif., has seen gasoline fall a few cents in the past several days to $3.89, but he is afraid it will reverse course when higher state taxes take effect. The average price in California is already the highest in the Lower 48 states, at $3.99 per gallon.
Mehta is not taking any trips with his wife and child for the July Fourth holiday, and he will probably stay close to home the rest of the summer.
"At $3 or even $3.50 I would not complain too much," he said. "Anything higher than that I'm always thinking twice about taking the trip. In the past, if I wanted to go somewhere, I wouldn't think about it."
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By Greg Roumeliotis and Soyoung Kim
NEW YORK (Reuters) - Carlyle Group LP is weighing an initial public offering of CommScope Holding Company Inc, a telecommunications equipment provider it took private for $3.9 billion less than three years ago, two people familiar with the matter said on Tuesday.
The private equity firm is speaking to investment banks about possibly listing CommScope as soon as this year depending on market conditions, the people said.
Carlyle has yet to hire underwriters to handle the proposed offering, said the people, who asked not to be identified because the matter is not public.
Carlyle declined to comment and CommScope spokespeople did not respond to a request for comment.
The stock market's strong performance this year has emboldened private equity firms such as Carlyle, which buy companies with an eye to selling them at a big profit, to take their portfolio companies public.
Washington D.C.-based Carlyle took CommScope private in January 2011, in a deal valued at $3.9 billion, including debt.
Hickory, North Carolina-based CommScope is a major manufacturer of cables that underpin high-speed data networks. It traces its roots to Superior Cable Corporation, a telephone cable company created in 1953, and changed ownership several times until it went public in 1997.
Moody's Investor Service Inc said in May it expected CommScope to show modest growth over the next twelve months, driven by wireless carriers spending on infrastructure. Revenues are expected to organically grow at 2 percent to 4 percent on average over the next several years, it added.
The company had revenues of over $3 billion in the 12 months ending March 2013, according to Moody's.
In May, CommScope issued $550 million of payment-in-kind (PIK) notes that allow the company to pay interest payments to bondholders in more bonds rather than cash, according to Thomson Reuters IFR. The proceeds were used to pay Carlyle a dividend as well as to fund CommScope's activities.
JPMorgan Chase & Co , Bank of America Corp , Deutsche Bank AG , and Goldman Sachs Group Inc led the debt deal for CommScope in May, according to IFR, indicating their familiarity with the company. JPMorgan also advised Carlyle on the acquisition of CommScope.
Other private equity firms are also exploring IPOs in companies that they invested in relatively recently.
EP Energy LLC is also talking with banks about an IPO this year, people familiar with the matter told Reuters last week. The oil and gas company was acquired just last year by a consortium led by Apollo Global Management LLC for $7.15 billion in the largest U.S. leveraged buyout of 2012.
However, concerns that U.S. interest rates could rise may complicate IPO plans for some private equity firms.
For example, industrial and construction supplies company HD Supply Holdings Inc , which counts Carlyle among its private equity investors, priced its IPO last week well below its expected range.
(This version of the story adds dropped word "as" in the second paragraph.)
(Reporting by Greg Roumeliotis and Soyoung Kim in New York)
By Soyoung Kim
NEW YORK (Reuters) - Altegrity Inc, owned by private equity firm Providence Equity Partners, is looking to sell a division that provides background checks for private-sector employers and could fetch up to $1 billion, two people familiar with the matter said on Tuesday.
A potential sale of the HireRight division comes at a tough time for Altegrity, as another of the latter's units, USIS, faces a U.S. government investigation over its 2011 background check into Edward Snowden, the National Security Agency leaker.
Unlike USIS, which is the largest private provider of federal government background checks in the United States, HireRight focuses on private-sector employers and provides employee background checks, as well as drug and health screening for companies.
A successful sale of HireRight could help relieve financial woes for Altegrity, which has struggled to pay down debt as revenue and earnings take a hit from government spending cuts.
HireRight - one of the world's largest employment screening providers according to its website - has around $95 million in annual earnings before interest, tax, depreciation and amortization (EBITDA) and could be sold for roughly 10 times EBITDA, one of the people said.
Bank of America Merrill Lynch is advising on the auction process, which has attracted private equity interest and is advancing to the second round, the sources said, asking not to be named because the matter is not public.
Representatives for Providence Equity declined to comment. Altegrity did not immediately respond to requests for comment. Bank of America did not have immediate comment.
Altegrity, which Providence bought from Carlyle Group LP and Welsh, Carson, Anderson & Stowe for $1.5 billion in 2007, also expanded its intelligence and security consulting business through its $1.13 billion acquisition of Kroll in 2010.
In April, Moody's Investor Service Inc downgraded Altegrity's debt deep into junk territory, warning that unless its revenue and earnings rebound significantly in the near term, its capital structure may be unsustainable.
Several private equity firms including Providence, KKR & Co LP and General Atlantic LLC bought businesses in recent years on the assumption that areas such as cyber defense and intelligence remained relatively safe from government spending cuts.
The theory has turned out wrong so far for most of these firms, which came under increasing stress because of defense industry cuts, including the sequestration that began hitting in recent months.
A series of apparent security problems that allowed Snowden to leak details of secret U.S. surveillance programs could result in increased scrutiny of government contractors, and further pressure the companies' revenues and margins.
Irvine, California-based HireRight screens more than 6 million applicants annually and counts about 50,000 employers as customers, according to its website.
(Reporting by Soyoung Kim in New York, additional reporting by Greg Roumeliotis; Editing by Bernadette Baum, Bernard Orr)