Good News for Drivers: Gas Prices Can Fall More

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Gasoline prices dropped on Tuesday for the 26th straight day as lower oil prices continued to flow to the nation's drivers.

It looks like there is room for pump prices to move even lower, if oil prices and wholesale gasoline prices stay in the neighborhood of where they are now.

After hitting a national average of $2.929 per gallon on May 6, retail gasoline prices have fallen 20.2 cents, or nearly 7 percent, to $2.727 per gallon on Tuesday.

Tom Kloza of the Oil Price Information Service said while the daily streak of lower prices is likely to end before mid-June, prices still have another 10 or 12 cents to fall.

Prices in some parts of the country already are well below the national average. Ohio, Missouri, South Carolina and Oklahoma are among the states where gas has dropped below $2.60 per gallon.

The federal government will release its weekly report on gasoline prices nationwide later Tuesday.

Oil has fallen from $87.15 per barrel a month ago amid worries that the European debt crisis could hurt the global economic recovery and squash demand for crude.

Retail gasoline prices fell 0.5 cents overnight, 5.5 cents in the past week and 15.6 cents in the past month. Pump prices are 21.5 cents higher than a year ago.

Oil prices turned around on Tuesday after initially moving lower. Benchmark crude for July delivery rose 23 cents to $74.20 a barrel on the New York Mercantile Exchange. The contract settled down 58 cents at $73.97 on Friday.

Markets in the U.S. were closed Monday for the Memorial Day holiday. Crude traded as high as $75.17 a barrel in Europe on Monday.

Oil prices moved higher as the euro rose against the dollar after hitting a four-year low earlier Tuesday. At the same time, U.S. stock markets gained ground after the Commerce Department said construction spending rose by the biggest amount in nearly a decade and the Institute for Supply Management said its manufacturing index came in better in May than economists forecast.

Commodities priced in dollars, like oil, become more expensive for investors holding euros when the dollar gains.

In other Nymex trading in July contracts, heating oil added 0.83 cent at $2.0128 a gallon and gasoline rose 0.07 cent to $2.0259 a gallon. Natural gas gained 1.5 cents at $4.356 per 1,000 cubic feet.

In London, the Brent crude July contact fell 95 cents to $73.70 on the ICE futures exchange.

Associated Press writers Pablo Gorondi in Budapest and Alex Kennedy in Singapore contributed to this report.

Copyright 2010 by The Associated Press. All Rights Reserved.

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CBN News
Mark Williams

Mark Williams

AP Energy Writer

The Associated Press is the backbone of the world's information system serving thousands of daily newspaper, radio, television and online customers with coverage in all media and news in all formats. It is the largest and oldest news organization in the world, serving as a source of news, photos, graphics, audio and video.