Price of Gasoline Declines Further

California and U.S. gasoline prices fell for the seventh straight week, reaching the lowest level since March, the Energy Department reported Tuesday.

And despite a jump in oil futures during the last week, pump prices still have room to decline, analysts said.

Pump prices in the week ended Monday dropped in every region of the country and fell the most in California, where the average price for self-serve regular slipped 4.3 cents to $2.391 a gallon, according to a weekly survey of service stations by the Energy Information Administration, the Energy Department’s statistical arm. The California average, which peaked at a record $2.592 a gallon April 11, remains 6.4 cents higher than a year ago.

The nationwide average price for regular fell 2.8 cents to $2.097 a gallon, or 4.6 cents higher than a year ago. The U.S. average topped out at a record $2.28 a gallon April 11.

San Francisco topped the agency’s survey of cities, with the price of gasoline down 7.3 cents to $2.433 a gallon.

The Gulf Coast states had the cheapest fuel, with the average price down 2.6 cents to $1.996 a gallon. Among major cities, Houston had the cheapest pump price, with fuel down 1.9 cents to $1.964 a gallon.

Gasoline prices, still high by historical standards, have eroded amid a buildup in U.S. motor fuel stocks and a decline in oil prices from a record $57.27 a barrel April 1.

But crude oil futures have been rising for the last six trading sessions, rebounding to a three-week high that is about 23% higher than a year ago. The U.S. benchmark light, sweet crude for July delivery settled Tuesday at $51.97 a barrel, up 12 cents, on the New York Mercantile Exchange.

In mid-May, prices fell below $47 a barrel in response to steadily rising crude inventories, but last week’s surprise drop in U.S. oil supplies brought nervousness back into the market.

The gasoline contract for June delivery, which expired Tuesday, fell 0.59 cent to $1.469 a gallon in New York. The more active July contract dropped 0.7 cent to $1.467 a gallon.

The summer driving season in the United States, which kicked off Monday with the Memorial Day holiday, has some traders worried that high gasoline demand could cause supplies to tighten.

However, brokers said U.S. crude inventories were at healthy levels.

Based on wholesale gas costs and softening demand, retail fuel prices will continue to decline for a few more weeks, said Tom Kloza, chief oil analyst at the Oil Price Information Service.

“I don’t get the sense that Memorial Day weekend travel was spectacular,” Kloza said.