Gas prices drop as cost of oil falls
NEW YORK - Retail gasoline prices retreated yesterday for the first time in nearly two months and benchmark crude prices tumbled about 4 percent.
The World Bank said the global economy would shrink more than previously stated and burgeoning supplies of crude and gasoline finally appeared to grab hold of energy prices that since early May have appeared to shake off market fundamentals. Benchmark crude for July delivery dropped $2.62 to settle at $66.93 on the New York Mercantile Exchange. The July contract expired yesterday, and most of the trading already has shifted to the August contract, which lost $2.52 to settle at $67.50.
Average retail gasoline prices fell for the first time in 54 days. The national average for pump prices fell 0.3 cents overnight to $2.69 a gallon, according to auto club AAA, Wright Express, and Oil Price Information Service. A gallon of gas jumped by 28.1 cents in the past month as refiners slowed production and consumption increased during the summer driving season. Gas is still $1.383 cheaper than it was the same time last year, when crude was on a historic run toward $150 per barrel.
It should get even cheaper to fill up later this summer, said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service. Gas futures contracts have dropped 10.2 percent since peaking last week, and those falling prices should work their way to filling stations around the country in the next several days. “I think we’ll see price drops every day this week,’’ Kloza said.
Oil executives have maintained that the rising energy prices were more a reflection of investor enthusiasm than market fundamentals.