Gas/Oil Prices Fall

WASHINGTON — Gasoline prices will likely continue to fall in the next few weeks as lower oil costs and reduced demand push the price at the pump lower. But a steep drop is unlikely. The nationwide average price for a gallon of regular was $3.809 on Monday, the Energy Department said. That was down 7.1 cents from a week ago and 7.4% lower than the peak of $4.114 hit July 7. A separate survey from AAA and the Oil Price Information Service found the average U.S. price was $3.81 Monday. The U.S. average will likely fall another 6 cents to 15 cents in the next few weeks and will be as low as $3.50 in some parts of the country, based on the recent drop in oil prices, OPIS analyst Tom Kloza says.

But prices are unlikely to stage a massive decline. That's in part because many gas station owners lost money in recent months as their costs increased faster than they could raise pump prices. Heavy competition and a desire to maintain sales volume prevented them from keeping up with escalating costs. Now, some of those owners will be trying to recoup those losses as costs fall. While oil prices jumped 40% in three months before peaking in early July, the average price at the pump rose 23%. The cost of oil accounts for nearly three-quarters of the retail price of gasoline.