Gas prices tumble in state, U.S.
Pump prices tumbled again around the nation in the last week, with the U.S. average cost falling to its lowest level in nearly four years, the Energy Department said Monday.
California’s decline was almost as dramatic, tumbling to the lowest level in nearly three years on a day when even the hijacking of a Saudi oil supertanker by pirates couldn’t keep crude oil from continuing its own steep descent.
The U.S. average price of a gallon of self-serve regular gasoline fell 15.2 cents to $2.072, down 50% from its all-time high of $4.114 on July 7, according to the Energy Department’s weekly survey of filling stations around the country. The price was the lowest since March 14, 2005, when the average in the nation stood at $2.056 a gallon.
The California price fell 18.1 cents to $2.374 a gallon during the week, which was 48% off the record of $4.588 set June 16. It was the lowest average for California gasoline since the $2.328 recorded Jan. 9, 2006.
Analysts attributed the decline to weak demand because of the souring economy.
The National Retail Federation has predicted that the nation’s big container ports will handle less cargo this year than at any time since 2004. Jonathan Gold, vice president of supply chain and customs policy for the industry group, described it as a year in which retailers were just as concerned about having excess inventory on hand that would have to be marked down in price as they were about having enough on hand to meet the weak consumer demand.
Growing concern about the economy was one reason news that Somali pirates had conducted their most brazen high-seas attack yet -- hijacking a Saudi-owned oil supertanker -- barely caused a ripple in the oil markets. Crude oil for December delivery fell $2.09 to $54.95 a barrel Monday on the New York Mercantile Exchange.
“The dollar, weak financial markets and the slowing global economy are the things that are influencing oil today,” said Phil Flynn, vice president and senior energy analyst at Alaron Trading Corp. in Chicago.
The only bullish possibility for oil in the near term was cold winter weather, said Michael Wittner, global head of oil research for Societe Generale.
The huge drop in the price of retail gasoline wasn’t expected to send Americans out on any long trips behind the wheel or help jump-start the moribund economy. Gasoline prices were expected to fall even lower as a result.
“A majority of states now have at least some stations selling gasoline for less than $2 a gallon, and there are pockets in the Midwest and southwest where retail gasoline fetches less than $1.70 a gallon,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.
The separate gas price survey of credit card receipts from 10,000 locations conducted by the oil information service on behalf of AAA found that 15 states had average prices of less than $2 a gallon, compared with just four states two weeks ago.
“OPIS estimates that Americans are paying about $750 million per day less for gasoline than they were in mid-July when prices topped $4.11 a gallon,” Kloza said.