Crude Oil Drop May Cut Gas Prices

Gasoline prices should head downward after a two-month rise, following recent declines in the price of crude oil, industry analysts say. But experts doubt last year’s low of 75 cents a gallon will return.

Since Dec. 19, the average price of regular unleaded gasoline at Los Angeles self-service stations has jumped from 75.5 cents a gallon to 92.3 cents, said Trilby Lundberg, publisher of the 50-state Lundberg Survey.

Analysts cited a worldwide oil surplus and rumors that a production agreement between members of the Organization of Petroleum Exporting Countries is falling apart as reasons for the anticipated decline.

“Everything is hinged to the price of crude oil,” said Vic Rasheed, executive director of the Service Station Dealers of America in Washington. “Within the next three months, we’re probably going to see a drop of another $2 to $3 dollars a barrel. If that happens, you might see a reduction of about 6 cents a gallon.”

In December, OPEC’s 13 members voted to cut the cartel’s oil production by 7.6%, the lowest ceiling in the organization’s 27-year history, and to fix its prices at higher levels of about $18 a barrel.