Retail gasoline prices are falling, but slowly. Even worse for consumers during a weak economic recovery, the pump pain remains far above the cost of filling up a tank a year earlier.
The average price for a gallon of regular gasoline in California dropped 2.1 cents a gallon in the last week to $3.923, according to the Energy Department's weekly survey of service stations, released Monday. A year earlier, the price was $3.005.
Nationally, prices were down 6 cents to an average of $3.601 a gallon. A year earlier, the national average for regular gasoline was $2.723.
"As we enter October, we'll see markets slowly quiet down, with retail gasoline prices falling to $3.35 to $3.55 on average by Thanksgiving, with the exception being typical hot spots on the West Coast," said Patrick DeHaan, a senior petroleum analyst at GasBuddy.com, a price-tracking website.
In other energy news, oil was driven lower by concerns that Europe would be unable to solve its debt crisis and by expectations that demand for the commodity would fall in the coming days.
U.S. benchmark crude fell $2.26 to $85.70 a barrel on the New York Mercantile Exchange. European benchmark Brent North Sea crude dropped $3.098 to settle at $109.14 on the ICE Futures Exchange in London.
Long term, oil and fuel prices will increase, the Energy Department said.
Even with weak demand for fuel in the U.S. and other developed economies in Europe, world energy consumption will soar in the coming decades, mostly driven by China and India and the emerging nations of Asia and Latin America, according to the Energy Department's International Energy Outlook 2011, released Monday.
The surge in demand is expected to raise oil prices to a sustained $125 a barrel by 2035, the report said. In spite of increases in renewable sources of energy, the world's use of petroleum "grows from 85.7 million barrels per day in 2008 to 97.6 million barrels per day in 2020 and 112.2 million barrels per day in 2035."