Stalled bailout of Greece sends oil prices down
Doubts about a plan to bail Greece out of its financial mess helped drive oil back under $85 a barrel in trading Monday, analysts said, adding that gasoline prices will probably see their peak for the year by the Memorial Day holiday.
For now, pump prices are holding steady, according to the Energy Department’s weekly survey of filling stations, released Monday. The average price of a gallon of regular gasoline in California fell two-tenths of a penny to $3.088. The California average has varied by just three cents over the last six weeks.
Nationally, the average fell 1.1 cent to $2.849 a gallon, keeping the price within the 5-cent range in which it has fluctuated the last five weeks.
But the price is still costly for most motorists compared with last year, said Tom Kloza, chief oil analyst for the Oil Price Information Service in Wall, N.J. At this time last year, a gallon of regular was 74.8 cents cheaper in California and 80 cents cheaper nationwide, Energy Department statistics show. Kloza said that meant that Americans were spending $200 million to $300 million more for gasoline every day than they were last year.
If the national average reaches $3 a gallon by the Memorial Day weekend, when the summer driving season begins, as Kloza predicts, “U.S. motorists will be spending about $1.16 billion a day on gasoline.”
Crude oil prices fell Monday after a $60-billion rescue plan for Greece was again put on hold with German Chancellor Angela Merkel saying she won’t release funds until Greece reveals a convincing plan for reducing its deficit.
Phil Flynn, an analyst for PFGBest Research in Chicago, said that was the primary reason for Monday’s drop in oil prices. Crude oil futures for June delivery fell 92 cents, or 1.1%, to $84.20 a barrel on the New York Mercantile Exchange.
