Gasoline prices fall again
Crude oil futures drop, meaning more relief for consumers could be on the way. The Energy Department says the average gas price declined to $3.88 a gallon nationally and $4.205 in California.
Gasoline prices are still tumbling, the government reported Monday, while a steep drop in crude oil prices in New York futures trading could indicate that more relief for consumers is on the way.
The U.S. average price for a gallon of self-serve regular gasoline slid 7.5 cents to $3.88, its lowest level since May 19, according to the Energy Department's weekly survey of filling stations. In California, the average fell 11.2 cents to $4.205. It was the seventh straight weekly decline for pump prices in the state, which peaked at $4.588 on June 1.
Even with the recent declines, gas prices in California are almost $1.20 a gallon higher than a year ago.
On the New York Mercantile Exchange, meanwhile, crude for September delivery fell $3.69 a barrel, or 2.9%, to $121.41, its lowest close since May 5. It traded as low as $119.50 a barrel during the day's hectic session.
The drop in crude was part of a general decline in commodity prices, with natural gas, copper, gold, sugar, corn and other products closing lower. Gasoline futures fell 2.6% to a three-month low of $3 a gallon.
Analysts said further evidence that sky-high gas prices and the weak U.S. economy are reducing the demand for gasoline is trumping concerns about tensions over Iran's nuclear ambitions, renewed violence in Nigeria and the threat that Tropical Storm Edouard poses to the oil-producing areas in the Gulf of Mexico.
"The thought awhile back was that demand was going to hold up pretty well in the face of higher prices, but it finally hit a wall," said analyst Brian Youngberg of brokerage Edward Jones in St. Louis.
In addition, speculative traders appear to be losing their appetite for oil, which is down more than 16% from its top all-time close of $145.29 a barrel July 3.
"Speculation is a knife that cuts both ways," said Jim Ritterbusch, president of oil trading advisory firm Ritterbusch & Associates in Galena, Ill. "It forces prices to overshoot on the upside, but it also forces prices to overshoot on the downside. We're probably going to see prices drop much further than people anticipate."
The situation in Iran is key, Ritterbusch said. The United Nations is weighing more economic sanctions against Iran after the oil exporter indicated it had no plans to abandon its nuclear development program.
If the Iranian situation is resolved without a serious confrontation, crude prices "could easily drop to $100 a barrel," Ritterbusch said, with gas prices retreating to $3.25 a gallon nationally.
- Calif. to See Gas Prices Rise Again Mar 08, 2002
- Lockyer Accuses Oil Firms of Cartel Action Apr 01, 2000
- National Gas Prices Up 5 Cents in Survey Mar 10, 2003
