Gasoline prices fall again
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The average retail gasoline cost fell about 5 cents a gallon in California and nearly 7 cents nationwide over the past week, the Energy Department said today, as prices continued to recede from the highs of the year set June 22.
The state’s average cost of a gallon of regular gasoline dropped to $2.829, down 5.1 cents for the week and 17.6 cents since June 22, according to the Energy Department’s weekly survey of filling stations. The U.S. average declined 6.5 cents to $2.463 a gallon, down 22.8 cents from its high for the year.
Crude oil prices rose 42 cents to $63.98 a barrel on the New York Mercantile Exchange, short of the benchmark of $65 a barrel. Much of oil’s movement was influenced by a weak dollar, analysts said. Crude also was buttressed by a strong day on global equity markets.
Another factor influencing investors was the weekend agreement on $3 billion in rescue financing for CIT Group Inc., a 101-year-old lender to small to medium-sized businesses. CIT has been trying to stave off bankruptcy after it was hurt badly when credit markets froze up last year.
“This is a private sector bailout that did not involve the government stepping in. I think it helped give the market a renewed sense of confidence that people are willing to step out and take chances of that magnitude,” said Phil Flynn, vice president and senior market analyst for Alaron Trading Corp. in Chicago.
But another analyst saw no economic improvement anytime soon.
“You could have an economy that just keeps limping along rather that moving strongly,” said James DiGeorgia, editor of the Gold and Energy Advisor newsletter. If that happens, DiGeorgia added that he expected oil to keep trading at the low end of a $65 to $85 a barrel range.
Flynn said that the fragility of consumer confidence could be seen in driving statistics released today by the Transportation Department.
In May, U.S. motorists drove 257.3 billion miles, up 200 miles or 0.1% compared with a year earlier. That was in spite of gasoline prices that were significantly lower than they were in 2008. In April, the increase was 1.3 billion miles or 0.5%.
“People were more confident in April that a recovery was beginning,” Flynn said. “Then that confidence waned in May and gasoline prices shot back up. That’s a good reflection of where we are with consumer confidence.”
-- Ronald D. White
