After 4-month surge, gas prices start falling
NEW YORK (AP) – The worst appears to be over. Gasoline prices are going down.
After a four-month surge pushed gasoline to nearly $4 per gallon in early April, drivers, politicians and economists worried that prices might soar past all-time highs, denting wallets, angering voters and dragging down an economy that is struggling to grow.
Instead, pump prices have dropped 6 cents over two weeks to a national average on Friday of $3.88. Experts say gasoline could fall another nickel or more next week.
Drivers might also get to say something they haven’t since October 2009 – they’re paying less at the pump than they did a year ago.
“It’s nice, much more manageable,” said Mark Timko, who paid less than $4 per gallon Wednesday in the Chicago suburb of Burr Ridge, Ill., for the first time since March. “I wasn’t sure how high they were going to go this year.”
Gasoline prices are lower than they were a year ago in 11 states, according to the Oil Price Information Service. At $3.88, the national average is still high, but it’s down from a peak of $3.94. Predictions of $5 gasoline earlier this year have – mercifully – evaporated.
Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, expects gasoline prices to drop to just above $3.80 by late next week. Stuart Hoffman, chief economist at PNC Financial Services Group, said the falling prices will put more money into the economy for Americans to spend elsewhere.
A 10-cent drop in gasoline prices would mean drivers would have an extra $37 million per day to spend on other things.
Gasoline prices have been pushed high by crude prices that have averaged $104 per barrel this year. World oil demand is expected to set a record this year and a series of production outages around the world have kept supplies low.