Gas Prices Resume Their Slide

With Labor Day road trips firmly in the rearview mirror, California’s pump prices resumed their downward slide toward $2 a gallon, an Energy Department survey showed Tuesday.

California’s average price for self-serve regular gasoline fell 2.7 cents to $2.073 a gallon in the last week, the department’s Energy Information Administration said. The U.S. average fell 1.6 cents to $1.85 a gallon, according to the weekly survey of about 800 service stations.

Gasoline prices around the nation declined steadily for most of the summer despite record oil prices. That’s because gasoline supplies were abundant as refiners increased production, imports jumped and drivers conserved.

But as Labor Day approached, gas prices bumped higher. In California, the average climbed 4.9 cents to $2.10 a gallon in the week ended Aug. 30, breaking a string of 12 consecutive weekly declines.

With oil prices continuing to pull back from an all-time high of nearly $50 a barrel reached in August and demand falling, gasoline prices are expected to decline further, analysts say. California’s average gas price is 1.2 cents higher than it was a year ago, while the U.S. average is 13.3 cents above last year’s level.

Gasoline’s primary component, crude oil, was also a little cheaper Tuesday. The price of light crude for October delivery fell 68 cents to $43.31 a barrel on the New York Mercantile Exchange.

Traders attributed the decline to a statement by the president of the Organization of the Petroleum Exporting Countries that oil supplies were growing faster than demand as well as relief that petroleum production in the Gulf of Mexico wasn’t hurt by Hurricane Frances.