Good news for drivers: Gas prices can fall more
Gasoline prices dropped yesterday for the 26th straight day as lower oil prices and it looks like there is room for pump prices to move even lower.
After hitting a national average of US$2.929 per gallon on May 6, retail gasoline prices have fallen 20.2 cents, or nearly seven per cent, to US$2.727 per gallon on Tuesday.
Tom Kloza of the Oil Price Information Service said while the daily streak of lower prices is likely to end before mid-June, prices still have another 10 or 12 cents to fall.
Prices in some parts of the country already are well below the national average. Ohio, Missouri, South Carolina and Oklahoma are among the states where gas has dropped below US$2.60 per gallon.
The federal government will release its weekly report on gasoline prices nationwide later Tuesday.
Oil has fallen from US$87.15 per barrel a month ago amid worries that the European debt crisis could hurt the global economic recovery and squash demand for crude.
Retail gasoline prices fell 0.5 cents overnight, 5.5 cents in the past week and 15.6 cents in the past month. Pump prices are 21.5 cents higher than a year ago.
Oil prices turned around on Tuesday after initially moving lower. Benchmark crude for July delivery rose 23 cents to US$74.20 a barrel on the New York Mercantile Exchange. The contract settled down 58 cents at US$73.97 on Friday. Markets in the US were closed Monday for the Memorial Day holiday. Crude traded as high as US$75.17 a barrel in Europe on Monday.
Oil prices moved higher as the euro rose against the dollar after hitting a four-year low earlier yesterday. At the same time, US stock markets gained ground after the Commerce Department said construction spending rose by the biggest amount in nearly a decade and the Institute for Supply Management said its manufacturing index came in better in May than economists forecast.
Commodities priced in dollars, like oil, become more expensive for investors holding euros when the dollar gains.
In other Nymex trading in July contracts, heating oil added 0.83 cent at US$2.0128 a gallon and gasoline rose 0.07 cent to US$2.0259 a gallon. Natural gas gained 1.5 cents at US$4.356 per 1,000 cubic feet.
In London, the Brent crude July contact fell 95 cents to US$73.70 on the ICE futures exchange.
