Gasoline prices have fallen to their lowest levels since May nationwide and in California, the Energy Department said Monday. Among the factors pushing prices down: falling demand and indications that Tropical Storm Fay would steer clear of Gulf of Mexico petroleum facilities.
The price of a gallon of self-serve regular gasoline dropped 6.9 cents to an average of $3.740 nationally, according to the Energy Information Administration's weekly survey of filling stations. That's the lowest since May 12, but 95.5 cents higher than the same Monday a year ago.
California motorists saw prices fall 8.1 cents to an average of $4.037 a gallon, the cheapest since May 19, but still a staggering $1.175 above the year-ago price.
Experts said the downward price trend would continue in the near term, as crude oil futures fell an additional 90 cents Monday on the New York commodities market to $112.87 a barrel, more than 23% below the record of $147.27 set in July. But they differed sharply on their longer-term predictions. Some suggested that this was the start of a collapse in energy prices, while others predicted that the mild relief would be short-lived.
"If we can avoid a major storm and other problems, I see no reason why oil can't drop back below $100 and gasoline return to less than $3 a gallon nationally," said Phil Flynn, vice president and senior market analyst for the Alaron Trading Co. in Chicago.
But some experts noted that motorists were not the only Americans who were cutting back. Refineries, they said, had also scaled back their production rates and were leaving the country with a slim margin for error if a storm does hit the Gulf.
"I think we have seen most of the move downward," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. "Refiners are capitalists, too, and the safety margin has been removed in terms of supplies. If we have a major refinery shutdown or a bad storm, there's the potential to head right back up again."
Flynn said the drop in prices was a sign that they had finally risen to unsustainable levels and that drivers were making fundamental changes such as moving closer to their jobs and taking other steps to reduce their use of gasoline.
One motorist trying to make such a change is Greg Kimble, a postproduction visual effects supervisor who lives in the Miracle Mile area. He's been loath to get rid of his pride and joy -- a 1969 LeMans-blue Chevrolet Impala convertible with a white top. Kimble named the car after his grandmother, Mable.
