Oil futures bounce back; gasoline prices keep dropping
Crude oil prices rebounded Monday after ending last week at their lowest level since Dec. 21, but analysts said gasoline prices would fall in California and around the nation in the coming weeks because of plentiful supplies and weak demand.
Light, sweet crude oil for March delivery rose $1.54 to settle at $74.43 a barrel on news that the Institute for Supply Management found that economic activity in the U.S. manufacturing sector expanded in January for the sixth consecutive month and that the overall economy grew for the ninth consecutive month.
Analysts said oil prices also drew strength from violence in Nigeria, one of the most important suppliers of crude to the United States. Royal Dutch Shell said it had to close down three pumping stations after they were attacked by militants, who recently ended a three-month cease-fire with the Nigerian government.
Motorists saw retail gasoline prices fall over the last week, according to the Energy Department’s weekly survey of filling stations.
The average price of a gallon of regular gasoline in California fell 3.3 cents to $2.975, dropping to less than $3 a gallon for the first time since Jan. 4.
In Southern California, gas could be found for as little as $2.71 a gallon at a United Oil station in East Los Angeles and at a Thrifty station in Commerce, according to Gasbuddy.com, which tracks retail gasoline and diesel prices nationwide.
Nationally, the average price dropped 4.4 cents to $2.661 a gallon, the Energy Department said.
“You should continue to see prices drift lower,” said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. “The demand in this market is depressed, and there is plenty of gasoline available.”