Gasoline prices post first decline in weeks
Retail gasoline prices fell in California and nationally for the first time in several weeks, the Energy Department said Monday, but not deeply or early enough to stem what is expected to be another decline in local driving over the Fourth of July weekend. The relief might also be short-lived, as renewed violence in oil-rich Nigeria sent crude prices back above $71 a barrel.
California’s average price for a gallon of self-serve regular gasoline dropped 2.1 cents over the last week to $2.984, according to the Energy Department’s weekly survey of stations. But that small decline was the first drop since March 23, in a year in which California fuel prices have soared more than 65%. They ended 2008 at an average of $1.81 a gallon.
Nationally, the average price was $2.642 a gallon, down 4.9 cents over the previous week.
At this time last year, the average cost per gallon was $4.573 in California and $4.095 nationally.
“They go up like a rocket and come down like they are on a parachute,” said mechanic Lloyd Haines as he filled up on $2.85-a-gallon gas at a Chevron station on his way to work Monday morning.
That might be one reason the Auto Club of Southern California was reporting that fewer Southern Californians would be traveling for the Fourth of July weekend compared with last year, despite plenty of travel bargains.
“It’s not a big surprise to see a travel downturn this holiday given our economy, but the decline is not nearly as pronounced as last year,” said Auto Club spokesman Jeffrey Spring.
There were doubts Monday about whether prices would continue to fall once the markets react to the latest rebel attacks on oil facilities in Nigeria. Light, sweet crude for August delivery settled at $71.49 a barrel, up $2.33, or 3.4%, on the New York Mercantile Exchange.
Nigeria ranks fifth -- behind Canada, Mexico, Saudi Arabia and Venezuela -- in the amount of crude it exports to the U.S. Violence against its oil facilities has been nearly constant, eliminating about 400,000 barrels a day of its 2.4-million-barrel export capacity.
Some analysts said there was nothing new in the most recent attacks, but other experts, as well as oil market investors, believed that a new threshold had been crossed.
“It has definitely escalated,” said John Kilduff, senior vice president of energy at MF Global in New York. “Last week there was an attack on an offshore facility in Nigeria, and those had been considered safe.”