Gas pump prices keep dropping even as oil rebounds
Retail gasoline prices continue to fall, although oil prices are rebounding a bit from sharp drops last week. Oil’s small gain was based on hopes that European leaders would solve that region’s debt crisis and thus help drive up demand for the commodity, analysts said.
In California, the average price of a gallon of regular gasoline fell 6.4 cents over the last week to $3.734 on Monday, according to the U.S. Energy Department’s weekly telephone survey of service stations across the nation. That’s a drop of 52.3 cents a gallon from the high so far for the year of $4.257 a gallon May 2.
California prices still remain substantially higher than a year ago, when an average gallon cost $3.165.
Nationally, the average dropped 7 cents a gallon over the past week to $3.604. A year ago, the average price for a gallon of gasoline nationally was just $2.745.
Even with oil prices heading a bit upward, the prices for motorists were expected to stay nearly steady over the next month, barring any major, unexpected disruptions in supply.
Gasoline prices could rise slightly near the Labor Day weekend, traditionally one of the biggest driving holidays with families taking their last excursions of the summer. But on Sept. 15, California refineries begin the nation’s earliest switch from their more expensive summer blends to a cheaper winter formulation of gasoline, “which should keep the downward pressure on prices,” said fuel price analyst Bob van der Valk.
Among oil prices, the European benchmark, Brent North Sea crude, rose $1.88 to close at $109.91 a barrel Monday after dipping as low as $107.40 on the ICE Futures Exchange in London. That’s sharply off the high of the year of $127 a barrel in May.
The U.S. benchmark, West Texas Intermediate crude, regained $2.50 on Monday to $87.88 a barrel on the New York Mercantile Exchange. West Texas Intermediate is also down considerably from its high for the year — it hit just under $114 a barrel in May.
