Gas prices drop for third week in a row, an average of 8.4 cents nationwide

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Gasoline prices dropped an average of 8.4 cents a gallon nationwide in the last week to $2.528 a gallon for regular, the Energy Department said today.

The U.S. average price dropped for the third week in a row, partly because of an eight-week low in crude-oil futures.

The average price of a gallon of 87-octane gasoline in California dropped 7.2 cents to $2.88, down $1.64 from a year earlier, the government’s weekly survey of filling stations found.

The U.S. average was down $1.585, or 39%, from a year earlier, when it was $4.113.

Gasoline in the West Coast region cost an average of $2.819, the highest in the nation. The Gulf Coast had the lowest average, $2.385.

Crude oil for August delivery fell 20 cents to $59.69 a barrel on the New York Mercantile Exchange, the lowest settlement since May 19.

Monday’s futures price was down 59% from the record high of $147.27 a barrel on July 11, 2008.

The recent drop in gas and oil prices mirrors last summer’s performance, said Marie Montgomery, a spokeswoman for the Automobile Club of Southern California.

“The prices got to the level where they were just being bid up by investors, but had to fall because driving demand was down and there are really no production problems in our refineries,” Montgomery said. “We’re in the same spot this year and we’re seeing that these prices can’t sustain themselves. But while prices are dropping, they never drop as fast as they rise.”

-- Nathan Olivarez-Giles