Pump Prices Hit Low for 2006
Retail gasoline prices fell for the 10th straight week, bringing the nationwide average to its lowest point this year, the federal government said Monday.
Oil prices, meanwhile, saw their biggest jump in weeks amid news that the Organization of the Petroleum Exporting Countries would meet Thursday to consider production cuts. Analysts were divided Monday over the prospects for a market-changing move by the group, which supplies more than a third of the world’s crude.
If key producer Saudi Arabia agrees to rein in oil supplies, motorists soon could see gasoline prices head up again, said Phil Flynn, senior market analyst at Chicago-based Alaron Trading Corp.
“If OPEC is successful in stopping the decline in oil [prices], it would stand to reason that the price of gasoline would stop falling as well,” he said. “They could go down a little bit more, but we’re probably about at the bottom.”
The average cost of self-serve regular gasoline across the country dipped to $2.226 a gallon on Monday, down 3.5 cents from the previous Monday, according to a weekly survey released Monday by the Energy Information Administration. Helped by a 25% plunge in the cost of oil, the average pump price has fallen more than 81 cents a gallon since early August.
In California, the average price of gasoline fell 6.1 cents to $2.54 a gallon Monday for self-serve regular, the survey found. California prices have fallen 78 cents a gallon since mid-August.
Hawaii, which isn’t detailed in the government’s data, has the nation’s highest gas prices, with a statewide average of $3.012 a gallon, according to a separate survey by AAA. It is the only state where the average pump price is still above $3 a gallon. Prospects for lower prices there dimmed after Sunday’s earthquake caused Hawaii’s two gasoline refineries to lose power and halt fuel production.
In New York, the focus was on oil and OPEC. The organization’s decision to hold an emergency meeting in Qatar on Thursday pushed light, sweet crude for November delivery up $1.37 to $59.94 a barrel, still well below the record high of $78.40 a barrel set in mid-July during an electronic trading session.
After more than a week of informal negotiations, members of OPEC agreed over the weekend to hold a special meeting to finalize plans for a production cut of 1 million barrels a day. The details, however, remain sketchy.
“There are conflicting signals out of OPEC as to exactly what it is they’re going to cut,” said Andrew Lipow, a Houston-based industry consultant. “We’ll just have to wait and see.... It all comes down to what the Saudis want.”
