Worries that Tropical Storm Dolly could become a hurricane that might threaten the Gulf of Mexico sent crude oil prices past $131 a barrel Monday after big losses last week.
Meanwhile, gasoline prices retreated nationally and in California, the Energy Department said. Analysts attributed the decline primarily to lower demand.
Crude oil futures for August delivery increased $2.16 to $131.04 a barrel on the New York Mercantile Exchange because of the storm’s potential threat to refineries in Corpus Christi, Texas. The storm was expected to strengthen to a Category 1 hurricane by the time it makes landfall Wednesday.
“More than a few interested parties will be tuning in to weather updates this evening,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.
Last week, worries that a weakening economy would further slow demand sent oil down more than $16 a barrel, the biggest weekly decline ever in dollar terms.
At the nation’s gas pumps, a gallon of self-serve regular dropped 4.9 cents to an average of $4.064, according to the Energy Department’s weekly survey of filling stations. The U.S. average was $1.106 lower at this time last year.
In California, the average gas price fell 6 cents to $4.460 a gallon. A year earlier, the average was $1.342 lower.
Gasoline prices fell everywhere except the Rocky Mountain states, where the average edged less than a penny higher to $4.105 a gallon.
Gasoline prices averaged less than $4 a gallon in the Gulf Coast, Midwest and lower Atlantic regions and declined most in the Midwest, dropping 8.5 cents to an average of $3.981 a gallon.