Gas prices drop as economic crisis damps demand for fuel

The average price of regular gasoline at U.S. stations fell to $2.78 a gallon as the global economic slump curbed demand.

Gasoline dropped 53 cents, or 16%, in the two weeks ended Oct. 24, according to oil analyst Trilby Lundberg’s survey of 7,000 filling stations nationwide. Crude oil, which accounts for about 73% of gasoline’s pump price, has fallen 56% from a record $147.27 a barrel reached July 11.

“There’s never been a price crash like this,” Lundberg said Sunday. Prices have dropped 88 cents over the last 30 days “thanks to lower crude oil prices and shrinking U.S. gasoline demand.”

AAA, the nation’s biggest motoring club, said Sunday that regular gasoline at the pump cost $2.699 a gallon on average, down 34% from the record $4.114 reached July 17 and 4.9% lower than a year ago.

Crude oil futures on the New York Mercantile Exchange tumbled to a 16-month low as OPEC’s decision to slash production by 1.5 million barrels a day failed to ease concern that the global economic slump was curbing fuel demand. Oil dropped $3.69, or 5.4%, to $64.15 a barrel Oct. 24.