Crude falls as gas hits a record
The average U.S. pump price hit another record Monday, reaching $4.114 for a gallon of self-serve regular gasoline, up 1.9 cents from June 30, according to the Energy Department’s weekly survey of filling stations.
California, where motorists are driving a lot less these days, continued to be the biggest counterweight. The average price fell 2.3 cents to $4.550 a gallon. A year earlier, a gallon of gasoline on average cost $2.981 nationally and $3.136 in California.
In New York futures trading, crude oil for August delivery fell $3.92 to close at $141.37 a barrel Monday after slumping as low as $139.50 a barrel during the day.
Oil dropped because the dollar showed new strength against other currencies and the rhetoric on Iran’s nuclear program cooled. Also, Tropical Storm Bertha was upgraded to become the first hurricane of the Atlantic season that runs from June 1 to Nov. 30 -- but the storm turned north toward Bermuda and appeared likely to miss the U.S. East Coast entirely.
Combined, those developments shattered what one analyst called the “weekend worry premium.”
“All the things the market was worried about last week -- the storm, Iran and the dollar -- didn’t happen,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago.
But analysts warned that the down day didn’t mean the end of the oil run-up, which has dragged fuel prices higher.
“I think if oil had closed below $140, that might have been the start of a trend,” Flynn said.
Tom Kloza, chief oil analyst for the Oil Price Information Service, a markets-tracking company in Wall, N.J., said oil prices “might drift a little lower this week, but we’ll be higher a month from now and oil will be above $150 before the end of the year.”
Oil’s dizzying climb has wasted no time getting to the pumps, with U.S. motorists spending $96 million more each day for gasoline in June than they did the month before and $367 million more a day than a year earlier, according to the monthly transportation fuel index produced by the Oil Price Information Service.
The daily tally has risen so much that “Americans are paying more than $1 billion more than they did five years ago,” the report said.
Drivers, meanwhile, are continuing to look for new ways to cope.
San Jose resident Mike Atkins, 50, loves his 1984 Volkswagen Gti so much that he put the letters “Gti” in his e-mail address. Atkins, who is out of work, hasn’t driven the car in more than a month.
“I just figured I wouldn’t drive until prices started going down again, but it’s just not happening,” said Atkins, who is walking more on nearby errands than he used to and also looking into buying a motor scooter or a bicycle for use when he returns to work. “It’s just crazy, these prices.”
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