Worst of ’07 may be over at pump
Gasoline prices tumbled by an average of more than 9 cents around the nation over the last week, the Energy Department said Monday, leading analysts to suggest that the worst pain at the pump had probably come and gone for 2007.
California prices, which dropped 4 cents, could go as low as $2.75 in the coming weeks, the experts said.
The average price of a gallon of self-serve regular gasoline in California fell to $3.118, down from a high of $3.461 in early May, according to the Energy Department’s weekly survey of filling stations around the nation.
That was 10.2 cents below the year-ago price.
Nationally, the average dropped 9.1 cents to $2.958, well below the 2007 high mark of $3.211 recorded May 21 and 4.5 cents below the same week a year ago.
“We still have a hairy five weeks to go where something could go wrong, but wholesale prices for unfinished gasoline in California have dropped 26 cents since July 10. Barring a hurricane in the Gulf [of Mexico], it looks like the worst is over,” said Tom Kloza, chief analyst for the Oil Price Information Service in New Jersey.
Kloza added that another good sign for California motorists was that prices declined even though one of the state’s major refineries, Chevron Corp.’s El Segundo facility, had been operating at only 75% of capacity since early June and was due to resume full production this week.
Crude oil futures for September delivery remained high on New York commodities markets, but fell 90 cents to close at $74.89 a barrel.
The decline was based in part on the resumption of production at an important oil facility in Angola, analysts said. The drop also followed comments by officials of the Organization of the Petroleum Exporting Countries indicating that the cartel thought that oil prices above $60 to $65 a barrel were too high and indicating a willingness to boost production.
Analysts said it wasn’t clear whether OPEC would increase production before the end of the year. But they noted that the comments signaled a shift from just the last week, when cartel officials were saying crude supplies were adequate.
“That’s an important change of rhetoric from the cartel,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago. “That sudden change was the big news in oil markets today.”
