Driven lower by falling oil prices and shrinking demand, the nationwide average price for gasoline dipped below $3 a gallon on Monday for the first time since reaching record highs after Hurricane Katrina.
The cost of self-serve regular gasoline fell to an average $2.955 a gallon Monday, down 11.4 cents from $3.069 a week earlier, according to a weekly survey by the Energy Department.
In California, the per-gallon average dropped 5.2 cents to $3.004.
Analysts expect gasoline prices to continue to fall in coming days in response to a steady decline in the cost of crude oil and signs that high prices have blunted demand. On Monday, the price of benchmark U.S. light, sweet crude for October delivery closed at a five-week low of $63.34 a barrel, down 74 cents on the New York Mercantile Exchange.
Futures prices for gasoline, heating oil and natural gas closed lower on the Nymex on Monday.
"This next week is going to have one of the biggest dips in retail prices ever," said Tom Kloza, chief oil analyst at the Oil Price Information Service, a trade publication that tracks petroleum prices. He predicted a reduction of about 15 cents a gallon over 10 days, but added, "It'll be mostly east of the Rockies, because that's where we had the biggest spike."
Kloza and others noted that gasoline demand had fallen more than usual since Labor Day, a sign that record pump prices were prompting motorists to curtail fuel use.
Even with prices starting to ease at the pump, the effects of sustained high oil prices continue to ripple through industry.
On Monday, DuPont Co. said it would raise prices on 35,000 products -- including plastics, chemicals and seeds -- to offset the cost of petroleum. Many of the company's products are derived from raw crude oil, and its factories use large amounts of natural gas and other fuels to power equipment. Celanese Corp. of Houston, a leading supplier of chemicals used in resins and plastics as well as water treatment and sweeteners, also announced price increases.
Most of the airline industry, meanwhile, continues to falter, hit hard by losses that carriers blame in part on the cost of jet fuel. On Monday, amid reports that Delta Air Lines would soon seek Bankruptcy Court protection, the International Air Transport Assn. said high fuel prices would boost the industry's 2005 losses to $7.4 billion worldwide, 23% more than expected.
