Retail gasoline prices continued to trickle down in California and nationwide in the last week as worries about the economy kept many people close to home over the Fourth of July weekend. Investors sharing those concerns sent the price of crude oil down Monday for a fourth straight trading day.
The average price of a gallon of self-serve regular gasoline in California fell 3.2 cents to $2.952 a gallon Monday, according to the Energy Department's weekly survey of filling stations. The nationwide average fell 3 cents to $2.612 a gallon.
Meanwhile, last week's higher-than-expected unemployment numbers were still battering the oil market Monday. Crude futures for August delivery tumbled $2.68, or 4%, to $64.05 a barrel.
"The question is how far it's going to roll back," said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago. "If it passes below $60 a barrel, we could easily test the $50-a-barrel range, but it is still pretty far from $60 right now."
John Kilduff, an energy analyst with MF Global in New York, predicted that oil would fall to $50 a barrel and not rebound until there was incontrovertible proof that an economic recovery was underway.
"The market needs to see some tangible evidence that we are on the comeback trail economically. We're not out of the woods yet," Kilduff said.
Philip K. Verleger Jr., an energy expert and a professor at the University of Calgary in Canada, said the world's oil producers have been pumping 85 million barrels a day at a time when global oil demand has been about 2 million barrels a day less than that because of the worldwide recession. That imbalance, he said, has left a serious glut of oil on the market.
"That means oil prices have to come down," Verleger said.
Despite the declining pump prices, motorists such as Jo Carol Hunter of Newport Beach were not in a celebratory mood. A year ago, the sales representative for a healthcare company was irate as California gasoline approached an average of $4.58 a gallon.
Hunter, who drives a 1998 Toyota Camry, says she has reduced her recreational driving by 50% and has cut back on driving for work as well.
"At 63, I am really jaded," she said. "I don't know that we can do much to control gas prices, so trying to save myself is uppermost in my mind."
Hunter added, "Are we always going to be at the mercy of these oil-rich countries? I think we are. It's a fix we have gotten ourselves into."