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NEW YORK -- U.S. motorists should soon see sharply reduced prices at the pump, as oil prices Monday fell to their lowest point so far this year, and are now down roughly 20 percent in just two weeks as investors worry about the ripple effects of a debt crisis in Europe, The Associated Press reported.
The turnaround in oil prices has been sudden -- crude hit an 18-month high of $87.15 a barrel during trading May 3. It settled Monday at $70.08 after dipping as low as $69.27. The plunge is similar to the fall from mid-January to early February, when prices fell from $84.95 to $69.50 per barrel, but the big difference now is that the latest decline occurred at the onset of summer driving season, according to the AP report.
Gas has fallen just 2 percent nationwide since peaking earlier this month at $2.929 per gallon. But that pace should pick up heading into the Memorial Day weekend and the summer driving season, according to the report. Prices in many markets in the U.S. will be $2.75 per gallon or lower by next week, said Tom Kloza of the Oil Price Information Service.
The only losers from lower crude prices will be oil producers, but they still will make plenty of money at the current prices, Kloza told the AP.
Gasoline prices fell 0.5 cents overnight to a national average of $2.867 per gallon, according to auto club AAA, Wright Express and OPIS. Prices have dropped 4.1 cents in the past week and 6.2 cents since peaking May 6. Prices remain 55.9 cents higher than a year ago, but the gap is narrowing, the report stated.
If oil prices remain around $70 per barrel, Kloza said pump prices could average about $2.60 to $2.65 per gallon, with some parts of the U.S. around $2.50 or so.
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