Enjoy Cheaper Gasoline, for Now
California motorists should continue to enjoy cheaper prices at the pump for the next several weeks, commodities experts said Monday, because of plentiful supplies and the impending switch to a winter blend of fuel that is easier and cheaper to make.
The average price of self-serve regular gasoline in California fell more than a dime to $2.848 a gallon during the week ended Monday, according to the Energy Department’s weekly survey of gasoline stations. That was 10.6 cents below the average price during the same period last year.
Prices continued to fall even faster nationally, hitting their lowest levels since March. The U.S. average tumbled 12.1 cents to $2.497 a gallon, down 28.9 cents from a year earlier.
Monday marked the first time since March that American motorists spent less than $1 billion a day on gasoline, said Tom Kloza, chief oil analyst for the Oil Price Information Service. Kloza, who believes the California average could fall to $2.50 or lower, warned that the decline eventually would end.
“It’s pretty rare to see everyone happy and it won’t continue for long,” he said. “Prices will go higher once they find their off-season equilibrium in the next 40 days.”
For the time being, however, there were bargains to be had.
The Energy Department said the cheapest fuel could be found in the Midwest, where the average price for a gallon of gasoline was $2.319. A Cincinnati-area Costco was selling it for $1.89, according to CincyGasPrices.com.
The Los Angeles County average was $2.863 a gallon, the Energy Department said, but a Vons station in Lakewood was selling gasoline for $2.61 a gallon, according to LosAngelesGasPrices.com.
October oil futures posted a gain in New York trading Monday -- only the third in the last 11 sessions -- rising 47 cents to $63.80 a barrel.
Prices were reacting to concerns about Iran’s nuclear enrichment program and continued delays in starting production at oil giant BP’s Thunder Horse platform in the Gulf of Mexico. The facility, which is designed to process 250,000 barrels of oil and 200 million cubic feet of natural gas daily, was damaged by Hurricane Katrina in 2005 and will open in mid-2008 instead of early 2007, BP said Monday.
Oil futures have fallen 17% from the record high close of $77.03 a barrel July 14.
“With the market having been sold off as much as it had in the last few weeks, it was looking for any bullish story it could find,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp.
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