Gas prices at lowest point since May
Gasoline prices fell last week to their lowest levels since May nationally and in California, the Energy Department said today. Among the factors helping keep prices down: low demand and indications that Tropical Storm Fay in the Atlantic would steer clear of Gulf of Mexico petroleum facilities.Experts said the downward price trend would continue in the next few days to weeks as crude oil futures fell another 86 cents on the New York commodities market to $112.90 a barrel, more than 23% below the record of $147.27 set in July. But they differed sharply on their longer term predictions. Some suggested it was the start of a collapse in energy prices, while others saw indications that the mild relief would be short-lived.
"If we can avoid a major storm and other problems, I see no reason why oil can't drop back below $100 and gasoline return to less than $3 a gallon nationally," said Phil Flynn, vice president and senior market analyst for the Alaron Trading Co. in Chicago.
But others noted that motorists were not the only Americans who were cutting back. Refineries, they said, had also scaled back their production rates and were leaving the country with a slim margin for error if a storm does hit the Gulf.
"I think we have seen most of the move downward. Refiners are capitalists, too. ... If we have a major refinery shutdown or a bad storm, there's the potential to head right back up again," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey.
-- Ronald D. White
Photo: John Tangorra, left and Skip Thompson, right, of Naples, Fla., fill up extra gas cans as they prepare for Tropical Storm Fay on Florida's Gulf of Mexico coast today. "They're not telling us to leave so we might as well be prepared," Tangorra said. Credit: Greg Kahn / Naples Daily News
