Gasoline Prices Tumble
California motorists could see the state’s average price for a gallon of regular gasoline fall to $2.75 or lower in the coming weeks as the nation’s refineries closed out the summer driving season without serious problems and forecasters rolled back their projections of a harsher-than-normal hurricane season.
The average price of self-serve regular gasoline in California fell 8.8 cents to $3.01 a gallon during the week ended Monday, according to the Energy Department’s weekly survey of gas stations that was released a day late because of the Labor Day holiday. The average was 4.6 cents below the price one year ago.
Nationally, the average gasoline price drop was even more pronounced, shaving 11.8 cents to $2.727 a gallon, down 34.2 cents from a year earlier.
It was the first time since February 2004 that a current weekly gasoline price was below the year-earlier average, said Tom Kloza, chief oil analyst for Oil Price Information Service.
Kloza predicted that an additional 25 cents or more would be whittled away from the state’s average price in the near future.
“This has yet to run its full course. You are going to see much lower prices in California. Markets tend to overreact and just as they overreacted on the upside last year they are overreacting on the downside now,” Kloza said.
A year ago, Hurricane Katrina slammed the Gulf Coast oil and gasoline industry and was followed on Sept. 24 by Hurricane Rita.
But so far this year, not a single storm has entered the gulf, prompting hurricane trackers at Colorado State University to sharply revise their predictions Friday down to “a slightly below-average hurricane season.”
Colorado State researchers also said an El Nino weather pattern was possible in the Pacific this fall, which could result in milder winter temperatures.
Both projections, along with news that Chevron Corp. had made a large oil discovery in the Gulf of Mexico, helped drive oil futures lower Tuesday on the New York Mercantile Exchange. October futures for light sweet crude fell 58 cents to $68.60 a barrel.
The U.S. benchmark grade of crude peaked at $77.03 a barrel in July. The cost of oil accounts for about half of the price of gasoline at the pump.
In Los Angeles County, service stations were selling regular gasoline Tuesday for as low as $2.79 a gallon, according to Los AngelesGasPrices.com.
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