The average retail price of gasoline fell about 5 cents a gallon in California and nearly 7 cents nationwide over the last week, the Energy Department said Monday, as prices continued to recede from the highs of the year set June 22.
The average cost of a gallon of regular gasoline statewide dropped to $2.829, down 5.1 cents for the week and 17.6 cents since June 22, according to the Energy Department's weekly survey of filling stations. The U.S. average declined 6.5 cents to $2.463 a gallon, down 22.8 cents from its high for the year.
Crude oil prices rose 42 cents to $63.98 a barrel on the New York Mercantile Exchange, short of the important benchmark of $65 a barrel. Much of oil's movement was influenced by a weak dollar, analysts said. Crude also was buttressed by a strong day in global equity markets.
Another factor influencing investors was the weekend agreement on $3 billion in rescue financing for CIT Group Inc., a 101-year-old lender to small- to medium-sized businesses. CIT has been trying to stave off bankruptcy after it was hurt badly when credit markets froze up last year.
"This is a private-sector bailout that did not involve the government stepping in. I think it helped give the market a renewed sense of confidence that people are willing to step out and take chances of that magnitude," said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago.
But another analyst saw no economic improvement any time soon. "You could have an economy that just keeps limping along rather than moving strongly," said James DiGeorgia, editor of the Gold and Energy Advisor newsletter. If that happens, DiGeorgia said, he would expect oil to keep trading at the low end of a $65- to $85-a-barrel range.
Flynn said the fragility of consumer confidence could be seen in driving statistics released Monday by the Transportation Department.
In May, U.S. motorists drove 257.3 billion miles, up 200 miles or 0.1% compared with a year earlier. That was despite gasoline prices that were significantly lower than they were in 2008. In April, the increase was 1.3 billion miles, or 0.5%.