Friday, September 26, 2008

Gas prices: 10% down from July high

Gas prices dropped for the ninth day in a row, bringing the total decline to nearly 17 cents over that time period, according to a nationwide survey of credit card swipes at gasoline stations.

The average price of unleaded regular dropped a further 1.7 cents to $3.683 a gallon, from $3.70 a gallon, according to the survey released Friday by motorist group AAA.

Prices are sharply lower from the high levels seen mid-summer and are just 3 cents shy of pre-Ike levels of $3.652 a gallon. Furthermore, gas is now selling for about 43 cents less than the record high price of $4.114 a gallon set on July 17. That remains to be roughly a 10% decline.

Gas prices headed higher following the devastation left behind by hurricanes Ike and Gustav. With the summer season quickly becoming a distant memory, the downward trend may continue. However, hurricane season is only halfway done, so a big storm could quickly change the landscape.

Prices have stayed below the key $4 level for some time now, but they still remain higher from a year ago, when gas was selling for less than $3 a gallon.

Current prices are about 87 cents, or 31%, higher from a year earlier at this time, when gas was selling for $2.81 a gallon.

Prices for gasoline also tend to follow oil prices, which had been moving lower since mid-July amid weakening demand. In fact, crude prices have dropped some 38% from their record settlement of $145.29 a barrel nearly two months ago.

Prices temporarily reversed course on Monday, posting the biggest one-day dollar gain ever. By Tuesday and Wednesday, the euphoria gave way to more somber trading.

Prices edged higher on Thursday as worries that the government's massive $700 billion bailout plan could be in jeopardy and subsequently cut into demand - which had already been a top worry. Crude prices were down $2.50 a barrel to $105.52 early Friday.

Meanwhile, only two states continue to report gas prices above $4 a gallon: Alaska and Hawaii.

Alaska continues to be the state with the most expensive gas prices, at $4.277 a gallon. Oklahoma unseated New Jersey for the second day as the state with the cheapest gas prices, at $3.389 a gallon, according to AAA's Web site.

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