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Oil prices rebound; gas prices fall

May 21, 2012|By Ronald D. White
  • Raciel Henry replaces the gas pump handle after filling up his motorbike with fuel at a Valero station in Miami.
Raciel Henry replaces the gas pump handle after filling up his motorbike… (Joe Raedle / Getty Images )

Crude oil prices have rebounded slightly after falling last week to their lowest levels in six months. Retail gasoline prices were falling in California after a painful 18.6-cent jump over the last two weeks. Nationally, the average retail price for gasoline was entering its seventh straight week of declines.

The U.S. oil commodities trading benchmark, West Texas Intermediate, was up 61 cents to $92.09 a barrel during trading on the New York Mercantile Exchange. In London, European benchmark Brent North Sea crude was up 86 cents to $108 a barrel on the ICE Futures Europe Exchange.

The rebound came as Chinese government officials said they would focus more efforts on growth. It also came after the leaders of the Group of Eight industrialized nations also said there should be more emphasis on growth in Europe and not on austerity programs alone.

Despite the drop, U.S. oil prices in 2012 are still averaging their highest levels ever, at about $103 a barrel, according to Energy Department statistics. That's above the current record of $99.67 a barrel set in 2008.

But some analysts said U.S. oil prices might have trouble climbing back above $100 a barrel soon, in large part because of the European problems of huge government debt and double-dip recession.

"The crisis in Europe is already having an impact well beyond its borders, with China's exports to the [European Union] down nearly 2% on the year" in the first quarter, said the Center for Global Energy Studies' monthly oil report.

The report said the European economic problems and a fragile U.S. recovery are "undermining oil demand growth worldwide."

Retail gasoline prices for a gallon of regular in California were down 0.8 cents since last week, to $4.337 a gallon, according to the AAA Daily Fuel Gauge Report. Nationally, the average for a gallon of regular gasoline continued its slow decline, down an additional 3.8 cents since last week, to $3.689 a gallon, the AAA report said.

Patrick DeHaan, senior petroleum analyst for the fuel price tracking websites run by GasBuddy.com, said the nation's gasoline prices should continue to fall as Memorial Day approaches.

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