Liberty's Blog: Gas prices Dip

Sunday, June 13, 2004

Gas prices Dip

U.S. Gas Prices See First Drop of Year It looks as though it is now official, although we noticed a drop over a week ago.

LOS ANGELES (AP) - A boost in gasoline production and a dip in oil prices have led to the first nationwide drop this year in gas prices at the pump, an industry analyst said Sunday.

The weighted national average price for all three grades of gasoline was $2.04 per gallon on Friday after rising more than 59 cents since mid-December, said Trilby Lundberg, who publishes the biweekly Lundberg Survey, which regularly polls nearly 8,000 gas stations across the United States.

The average price for all grades on the last survey in May was slightly above $2.10 a gallon.

"Whether for the rest of the summer gas prices will continue to trend down depends on OPEC's follow-through to increase oil output and how strong our gasoline demand turns out to be," Lundberg said Sunday. "We always consume the most in June, July and August."

The drop at the pump also reflects an effort by refiners to maximize their gasoline production and increase supply to meet summer driving demand.

The Organization of Petroleum Exporting Countries, which supplies more than a third of the world's crude, announced earlier this month that it would raise its official daily production quota by more than 2 million barrels to 26 million barrels and, if necessary, by an additional 500,000 barrels on Aug. 1.

Crude oil prices, which have been hovering above $40 a barrel in recent weeks, settled at $38.45 a barrel Thursday on the New York Mercantile Exchange.

The national weighted average price of a gallon of gasoline at self-serve pumps on Friday, including taxes, was about $2.01 for regular, $2.11 for midgrade and $2.20 for premium.

Tulsa, Okla., had the lowest average price of any city, with self-serve regular selling for about $1.75. The highest prices were found in the San Francisco Bay area, at $2.32, Lundberg said.