Gas Prices Continue to Drop

Following oil’s lead, average gasoline prices continue to head lower, sliding nearly 2 cents per gallon nationwide and about 3 cents per gallon in California in the last week, the Energy Department said Monday.

Crude oil fell to a 5 1/2-month low on Monday as traders bet that petroleum supplies would remain high even though the Organization of the Petroleum Exporting Countries last week announced plans to cut production in June.

In addition, some analysts have predicted that the outbreak of severe acute respiratory syndrome, or SARS, would reduce worldwide oil demand by dampening airline travel and economic activity in Asia.

The trading price of West Texas Intermediate grade, the U.S. benchmark, that would be delivered in June dropped 77 cents, or 2.9%, to $25.49 a barrel on the New York Mercantile Exchange, the lowest closing price since Nov. 14.

Retail pump prices dropped for the sixth straight week, with the U.S. average price of self-serve regular gasoline hitting $1.557 a gallon, down 1.7 cents, according to a weekly survey of about 900 retail gasoline stations nationwide by the Energy Information Administration, the statistical arm of the Energy Department. A year ago, the U.S. average price was 16.4 cents lower.

California motorists paid an average of $1.977 a gallon, down 3.2 cents from the prior week but up 37 cents from this time last year.

In Los Angeles, the average price was $1.952 a gallon, down 3.4 cents, while in San Francisco the average was $2.03 a gallon, down 3.2 cents.

Among the six major cities surveyed, San Francisco was the most expensive and Houston was the least, selling regular gasoline for an average of $1.413 a gallon.