U.S. refineries have managed to resolve some of their early 2007 production woes, and the more plentiful gasoline supplies again helped drive retail prices lower in California and around the nation in the last week, an Energy Department report showed Monday.
Some analysts said the decline was a brief reprieve in the early weeks of what was expected to be a more-severe-than-normal Atlantic hurricane season.
But others said that prices could continue to fall an additional 12 cents to 15 cents a gallon, based on a surge of imported fuel and recent drops in wholesale prices for gasoline.
Earlier in the year, the markets overreacted to supply problems and "got sloppy drunk on the prices," said Tom Kloza, chief oil analyst for Oil Price Information Service in Wall, N.J.
Kloza predicted that gasoline prices would be lower during the Fourth of July holiday than they were over Memorial Day weekend, adding: "This is a little bit of sobering up that we needed."
The average price of a gallon of self-serve regular gasoline fell 5.4 cents to $3.32 in California, according to the Energy Department's weekly survey of service stations around the nation.
That was 9.5 cents above the year-earlier price.
Nationally, the average dropped 8.1 cents to $3.076 a gallon, which was still 17 cents higher than during the same week in 2006.