Gasoline Prices Continue to Drop

Pump prices declined for the eighth week in a row, with California’s average retail gasoline price dropping 4.1 cents and the U.S. average losing nearly a nickel, a government energy forecasting agency said Monday.

The average price for a gallon of self-serve regular gasoline fell to $2.412 in California, the lowest price since late June, according to a weekly service station survey by the Energy Information Administration, an arm of the Energy Department. The California average, which peaked at a record $3.056 on Labor Day, was 17.6 cents higher than it was a year before.

The U.S. average fell below $2.20 a gallon for the first time since late June, reaching $2.154 a gallon, down 4.7 cents, the agency said. The national average is up 21 cents from a year earlier.

The U.S. pump price has dropped nearly 92 cents since early September, when it reached a record of $3.069 a gallon after Hurricane Katrina damaged Gulf Coast refineries and disrupted fuel supplies.

The drop in gasoline prices mirrors a decline in crude oil costs and an increase in gasoline production as more refineries resume their operations. However, three refineries that can process as many as 804,000 barrels of crude oil a day are still closed.

Oil slumped Monday as unusually mild temperatures in the U.S. curbed demand for heating oil and ministers of the Organization of the Petroleum Exporting Countries said they saw no need to trim production. Light, sweet crude for January delivery settled down $1.35, or 2.3%, to $57.36 a barrel in New York trading. Gasoline for December delivery slipped 3.94 cents to $1.418 a gallon.

OPEC indicated that it probably would keep supplies steady despite a 20% slump in U.S. crude prices since late August.

“The market is beautiful, it is in balance and inventories are at a very comfortable level,” Saudi Arabia’s oil minister, Ali Ibrahim Naimi, told reporters at a conference in Kuwait on Monday.

The cartel is due to meet in Kuwait on Dec. 12 with oil significantly below its late August intraday trading record of $70.85 a barrel and plenty of fuel in stock for the start of winter in the U.S., Europe and Japan. Naimi, who steers policy for the world’s biggest oil exporter, said Saturday that OPEC had no thought of cutting its output of 30 million barrels a day.

The weekly price for diesel fuel dropped 3.4 cents to $2.479 a gallon, the lowest level in 16 weeks but still 36 cents higher than it was a year before, the Energy Information Administration said. In California, the average diesel price fell 4 cents to $2.559 a gallon.