Gasoline prices fall even while oil costs rebound
Retail gasoline prices fell in California and across much of the nation over the last week, while crude oil recovered a little of the previous weeks’ losses.
The average cost of a gallon of regular gasoline in California fell 3.1 cents to $4.336 a gallon, according to the Energy Department’s weekly survey of fuel prices, released Monday. That followed two weeks of increases totaling 28.1 cents a gallon. Last year at this time, a gallon of regular gasoline in California was 12.1 cents cheaper.
The national average fell 4 cents to $3.714, marking the seventh straight week of declines.
Analysts were sharply divided over what the nation would be paying for fuel by the Memorial Day weekend, the traditional start of the summer driving season.
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.
But fuel-price specialist Bob van der Valk said that California may see another temporary surge because of tight gasoline supplies in the state. “California is at the lowest supply for gasoline in the month of May since 1992,” Van der Valk said.
In other energy news, the U.S. oil trading benchmark, West Texas Intermediate, was up $1.09 to $92.57 a barrel on the New York Mercantile Exchange. In London, European benchmark Brent North Sea crude was up $1.67 to $108.81 a barrel.
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 8 industrialized nations said there should be more emphasis on growth in Europe and not on austerity programs alone.
Despite recent declines, the average U.S. oil price in 2012 is the highest ever, at about $103 a barrel, according to Energy Department statistics. The record annual average was $99.67 a barrel set in 2008.
Some analysts said U.S. oil prices might have trouble climbing back above $100 a barrel soon, in large part because of huge government debt and double-dip recessions in Europe.
“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 added that the European economic problems and a fragile U.S. recovery are “undermining oil demand growth worldwide.”
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