The price of oil fell Thursday, shedding more than half its value since the summer's highs, after a government supply report signaled weak demand for petroleum products.
Light, sweet crude for November delivery fell $4.69 to $69.85 a barrel on the New York Mercantile Exchange. Oil is now down 52% from July's all-time high above $147 a barrel.
Thursday's closing price was the lowest since Aug. 23, 2007 when oil settled at $69.83 a barrel.
At one point during Thursday's session, the contract fell to $68.57 a barrel. That was the lowest intra-day level since June 27, 2007, when oil slid to $67.07 in New York floor trading.
Thursday's inventory report was "very bearish," said Phil Flynn, senior market analyst at Alaron Trading in Chicago. "There's a lot of supply hitting the market at a time when demand is questionable."
The oil market has been pressured recently by fears that a global economic recession will drive down the once-robust demand for energy.
Global stock markets have been volatile as governments worldwide have taken steps to restore confidence in the financial system. But investors appear focused on signs that the economy will remain weak even after the markets have stabilized.
Supplies. In its weekly inventory report, the Energy Information Administration said the nation's stockpiles of crude oil grew 5.6 million barrels in the week that ended Oct. 10. Analysts surveyed by energy research firm Platts were expecting the government to report an increase of 3.1 million barrels.
Gasoline stocks increased 7 million barrels, while supplies of distillates, used to make diesel fuel and heating oil, fell 500,000 barrels last week. The nation's supply of gas was expected to have grown by 3.1 million barrels and distillate stocks were forecast to decline 850,000 barrels.
Demand for gas averaged nearly 8.8 million barrels per day, over the last four weeks, according to the EIA. That's down by 5.2% from the same period last year.
The report also showed that total products supplied over the last four-week period has averaged 18.6 million barrels per day, down by 8.9% compared to the similar period last year.
The government report is normally released on Wednesday but was delayed due to the Columbus Day holiday on Monday.
OPEC. The Organization of the Petroleum Exporting Countries said Thursday that the "extraordinary meeting" it announced last week would be held nearly a month earlier than originally planned.
The meeting will now take place on Oct. 24. It was first scheduled for Nov. 18.
The change comes after OPEC's president, Chakib Khelil, reportedly said that the "ideal" price for oil is between $70 and $90 a barrel.
Moving up the meeting's date reflects the cartel's desire to put a floor under the rapidly declining price of oil by possibly cutting output, Flynn said. But Thursday's declines suggest that investors are more focused on demand issues than supply.
"The market is ignoring OPEC," Flynn said. "This is a demand-driven decline - a lack of demand."
Retail gas. Prices at the pump also fell Thursday.
The national average price for a gallon of regular gasoline fell 4.1 cents to $3.084 from $3.125 the day before, according to a daily survey by the American Automobile Association.
Gas prices have fallen 25% since the national average price toped $4.114 on July 17.
The average price of diesel fuel fell 3 cents overnight to $3.764
Thursday, October 16, 2008
Wednesday, October 15, 2008
Worst retail sales in three years
Retail sales suffered their biggest drop in three years last month, as American households reined in spending amid a tough job market, the financial crisis and falling home values.
The Commerce Department reported Wednesday that retail sales fell 1.2% in September, nearly double the 0.7% drop expected by economists. The last time the measure fell this sharply was in August 2005 with 1.4% decline.
Retail sales have fallen for the third month in a row, the first time that has happened according to government data going back to 1992. Consumer spending accounts for nearly 70% of the economy.
Auto sales
A steep 3.8% decline in auto purchases helped depress the overall sales for the month.
Even when volatile auto sales were stripped from the report, sales fell 0.6%, three times the 0.2% decrease economists had predicted.
The weak report shows that consumers cut down on everything except healthcare products and gas, according to Scott Hoyt, senior director of consumer economics at Moody's economy.com.
"The numbers are pretty terrible. Consumers were clearly not spending," Hoyt said.
Particularly troubling is the sharp drop in retail sales from the same time a year earlier. The last time that happened was October 2002 and, prior to that, in 1991, he said.
"This report is very clearly consistent with a recession story," Hoyt said, who added that even gasoline retailers could see their sales decline in October.
Sales fell across a wide spectrum of retail categories. For September, furniture and home furnishings reported a 2.3% drop, electronics retailers sales declined by 1.5%, and department store sales fell by 1.5%.
The August retail sales report was revised to a weaker 0.4% decline.
The Commerce Department reported Wednesday that retail sales fell 1.2% in September, nearly double the 0.7% drop expected by economists. The last time the measure fell this sharply was in August 2005 with 1.4% decline.
Retail sales have fallen for the third month in a row, the first time that has happened according to government data going back to 1992. Consumer spending accounts for nearly 70% of the economy.
Auto sales
A steep 3.8% decline in auto purchases helped depress the overall sales for the month.
Even when volatile auto sales were stripped from the report, sales fell 0.6%, three times the 0.2% decrease economists had predicted.
The weak report shows that consumers cut down on everything except healthcare products and gas, according to Scott Hoyt, senior director of consumer economics at Moody's economy.com.
"The numbers are pretty terrible. Consumers were clearly not spending," Hoyt said.
Particularly troubling is the sharp drop in retail sales from the same time a year earlier. The last time that happened was October 2002 and, prior to that, in 1991, he said.
"This report is very clearly consistent with a recession story," Hoyt said, who added that even gasoline retailers could see their sales decline in October.
Sales fell across a wide spectrum of retail categories. For September, furniture and home furnishings reported a 2.3% drop, electronics retailers sales declined by 1.5%, and department store sales fell by 1.5%.
The August retail sales report was revised to a weaker 0.4% decline.
Bank rescue will take time to work
The latest version of the bank bailout plan may be getting more support than others but even those who think it's a good idea say it won't lead to a quick economic turnaround.
The Bush administration announced Tuesday that it plans to invest $250 billion in the nation's banks, with nine of the largest banks receiving about half of that amount.
While this and other moves announced Tuesday should help convince banks to start lending to one another more freely, economic experts caution that the thawing of the credit markets will be a relatively slow process. It will take time before the benefits reach many businesses and consumers.
"Banks are still going to be a little hesitant about lending, particularly to borrowers with lower credit ratings. My hunch is [the economy} will come back faster than we think [it] might, but it's still something that'll likely takes months, perhaps a year," said William Isaac, a former chairman of the Federal Deposit Insurance Corp.
Economists say the credit crisis adds to underlying problems, including rising unemployment, a likely drop in exports due to slowing economies overseas and a decline in both corporate earnings growth and consumers' purchasing power.
"All of this unsticks the credit market, but at best that's half of the problem," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. "The other half of the problem is that we're in a recession here and in Europe and Japan. Global recessions are nasty."
Achuthan said job losses are likely to accelerate because of the recent credit problems and that will only put more downward pressure on housing prices -- no matter what steps are taken to limit mortgage foreclosures.
And if house prices continue to fall, he said the financial sector will, at best, limp along for the foreseeable future. However, Achuthan thinks the government made the right move because the alternative would have been worse.
"What we were looking at when credit markets froze up was a recession totally out of control, a recession on steroids," he said.
Jaret Seiberg, financial services analyst with The Stanford Group, said that he believes lending to businesses will improve first thanks to the capital injection into banks.
But he said that the credit squeeze on consumers won't turn around anytime soon. That's likely to mean more economic woes since consumer spending makes up about two-thirds of the overall economy.
Even Federal Reserve Chairman Ben Bernanke, during his prepared comments Tuesday, downplayed hopes of a quick recovery.
"I am not suggesting the way forward will be easy," he said. "But I strongly believe that the application of these tools...will help to restore confidence to our financial system and place our economy back on a path to vigorous, healthy growth."
Barry Ritholtz, CEO and director of equity research for Fusion IQ, said the government's decision to buy bank stocks was the right one. However, he said the delay in taking this step made the bailout effort more difficult for the Treasury Department.
"It's a great Winston Churchill quote, 'You can trust the Americans to do the right thing after they exhausted all other possibilities,'" he said. "I think the [government] could have negotiated a better deal, but what the hell."
Ritholtz said he's not certain how long it will take for credit to start flowing normally. But he's predicting at least three or four quarters of the U.S. economy shrinking rather than growing.
"I think things are starting to normalize but I couldn't take a wild guess when things get back to normal," he said. "It's uncharted territory. This is not your run of the mill recession. It's a much more significant recession than we've seen for some time."
Still, not all critics of the bailout are satisfied with the new plan for direct investment in banks. Some economists argue the move only encourages more risky behavior down the road and that the free markets should be allowed to work: i.e. more banks should be left to fail and credit should be tight.
Jeffery Miron, senior lecturer at Harvard University's Department of Economics, said such a scenario would not be "painless" but "it's not the end of the world and it's appropriate."
The Bush administration announced Tuesday that it plans to invest $250 billion in the nation's banks, with nine of the largest banks receiving about half of that amount.
While this and other moves announced Tuesday should help convince banks to start lending to one another more freely, economic experts caution that the thawing of the credit markets will be a relatively slow process. It will take time before the benefits reach many businesses and consumers.
"Banks are still going to be a little hesitant about lending, particularly to borrowers with lower credit ratings. My hunch is [the economy} will come back faster than we think [it] might, but it's still something that'll likely takes months, perhaps a year," said William Isaac, a former chairman of the Federal Deposit Insurance Corp.
Economists say the credit crisis adds to underlying problems, including rising unemployment, a likely drop in exports due to slowing economies overseas and a decline in both corporate earnings growth and consumers' purchasing power.
"All of this unsticks the credit market, but at best that's half of the problem," said Lakshman Achuthan, managing director of the Economic Cycle Research Institute. "The other half of the problem is that we're in a recession here and in Europe and Japan. Global recessions are nasty."
Achuthan said job losses are likely to accelerate because of the recent credit problems and that will only put more downward pressure on housing prices -- no matter what steps are taken to limit mortgage foreclosures.
And if house prices continue to fall, he said the financial sector will, at best, limp along for the foreseeable future. However, Achuthan thinks the government made the right move because the alternative would have been worse.
"What we were looking at when credit markets froze up was a recession totally out of control, a recession on steroids," he said.
Jaret Seiberg, financial services analyst with The Stanford Group, said that he believes lending to businesses will improve first thanks to the capital injection into banks.
But he said that the credit squeeze on consumers won't turn around anytime soon. That's likely to mean more economic woes since consumer spending makes up about two-thirds of the overall economy.
Even Federal Reserve Chairman Ben Bernanke, during his prepared comments Tuesday, downplayed hopes of a quick recovery.
"I am not suggesting the way forward will be easy," he said. "But I strongly believe that the application of these tools...will help to restore confidence to our financial system and place our economy back on a path to vigorous, healthy growth."
Barry Ritholtz, CEO and director of equity research for Fusion IQ, said the government's decision to buy bank stocks was the right one. However, he said the delay in taking this step made the bailout effort more difficult for the Treasury Department.
"It's a great Winston Churchill quote, 'You can trust the Americans to do the right thing after they exhausted all other possibilities,'" he said. "I think the [government] could have negotiated a better deal, but what the hell."
Ritholtz said he's not certain how long it will take for credit to start flowing normally. But he's predicting at least three or four quarters of the U.S. economy shrinking rather than growing.
"I think things are starting to normalize but I couldn't take a wild guess when things get back to normal," he said. "It's uncharted territory. This is not your run of the mill recession. It's a much more significant recession than we've seen for some time."
Still, not all critics of the bailout are satisfied with the new plan for direct investment in banks. Some economists argue the move only encourages more risky behavior down the road and that the free markets should be allowed to work: i.e. more banks should be left to fail and credit should be tight.
Jeffery Miron, senior lecturer at Harvard University's Department of Economics, said such a scenario would not be "painless" but "it's not the end of the world and it's appropriate."
Tuesday, October 14, 2008
Stocks erase early gains
Stocks turned lower Tuesday, erasing earlier gains, with investors pulling back in the face of the government announcement that it will spend $250 billion to buy stock in banks, the latest effort to thaw the frozen credit markets.
Credit markets eased a bit, with a key overnight bank lending rate falling. Treasury prices slumped, raising the corresponding yields. The dollar fell against the euro and gained versus the yen. Oil prices rose and gold prices fell.
The Dow Jones industrial average (INDU)fell 76 points, or 0.8% more than an hour into the session. The Dow was up as much as 406 points in the first minutes of trading.
The Standard & Poor's 500 (SPX) index slipped 0.9%.
The Nasdaq composite (COMP) tumbled 2.9%, with some of its large technology shares slumping after the previous session's advance. Microsoft (MSFT, Fortune 500), Dell (DELL, Fortune 500), Oracle (ORCL, Fortune 500) and Google all declined.
The Dow rallied 936 points Monday, its best one-day point gain ever, on bets that the worst of the credit crisis is over. Investors welcomed more specifics on the $700 billion bank bailout plan as well as a series of global initiatives aimed at loosening up credit.
The S&P 500 rose 104 points and saw its best single-day point gain ever. The Nasdaq's jump of nearly 195 points was the 10th best ever.
$700 billion: The Treasury Department, unveiling details of the $700 billion bailout plan approved earlier this month, said Tuesday it will pour $250 billion directly into the nation's banks in a dramatic move meant to stabilize the flailing financial system.
Nine of the largest banks have already agreed to participate. The program calls for the government to buy preferred shares in the banks, hold those shares until the market stabilizes and then sell them back to the banks. The program also limits executive pay.
The government is insuring all deposits in non-interest bearing bank accounts. This enables companies to manage their payroll and checking accounts without fear of surpassing the limits backed by the Federal Deposit Insurance Corp.
President Bush has also asked Congress for an additional $100 billion of the $700 billion to aid financial institutions.
And the Federal Reserve said it will start buying huge amounts of commercial paper starting Oct. 27, putting a start date to a program announced last week. Commercial paper is a key form of short-term debt that companies rely on for daily operations. (Full story)
The Fed has also pumped funds - possibily trillions of dollars - into the banking system in an effort to get banks to lend again. Central banks around the world have also stepped in to keep the system functioning.
But the credit markets have remained frozen amid the housing market collapse and subprime lending meltdown. Stocks have retreated as the credit crisis has dragged the already strapped economy deeper into what many say is a recession.
Last week was the Dow's worst ever, ending a stunning eight-session selloff that cut 2,400 points and 22% off the blue-chip indicator. The selling erased $2.4 trillion in market value from the Dow Jones Wilshire 5000, the broadest measure of the stock market.
Company news: In earnings news, Johnson & Johnson (JNJ, Fortune 500) reported quarterly earnings that ralllied from a year ago and topped estimates. The health care company also boosted its full-year profit forecast.
Other markets: U.S. light crude oil for November delivery rose 43 cents to $81.62 a barrel on the New York Mercantile Exchange. Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of $147.27 a barrel on July 11.
Gasoline prices fell another 4.3 cents overnight, to a national average of $3.163 a gallon, according to a survey of credit card activity by motorist group AAA. It was the 27th consecutive day that prices have decreased - in the past month alone, they're down more than 63 cents a gallon.
COMEX gold for December delivery tumbled $8.50 to $834 an ounce.
In currency trading, the dollar slipped against the euro and gained against the yen
Credit markets eased a bit, with a key overnight bank lending rate falling. Treasury prices slumped, raising the corresponding yields. The dollar fell against the euro and gained versus the yen. Oil prices rose and gold prices fell.
The Dow Jones industrial average (INDU)fell 76 points, or 0.8% more than an hour into the session. The Dow was up as much as 406 points in the first minutes of trading.
The Standard & Poor's 500 (SPX) index slipped 0.9%.
The Nasdaq composite (COMP) tumbled 2.9%, with some of its large technology shares slumping after the previous session's advance. Microsoft (MSFT, Fortune 500), Dell (DELL, Fortune 500), Oracle (ORCL, Fortune 500) and Google all declined.
The Dow rallied 936 points Monday, its best one-day point gain ever, on bets that the worst of the credit crisis is over. Investors welcomed more specifics on the $700 billion bank bailout plan as well as a series of global initiatives aimed at loosening up credit.
The S&P 500 rose 104 points and saw its best single-day point gain ever. The Nasdaq's jump of nearly 195 points was the 10th best ever.
$700 billion: The Treasury Department, unveiling details of the $700 billion bailout plan approved earlier this month, said Tuesday it will pour $250 billion directly into the nation's banks in a dramatic move meant to stabilize the flailing financial system.
Nine of the largest banks have already agreed to participate. The program calls for the government to buy preferred shares in the banks, hold those shares until the market stabilizes and then sell them back to the banks. The program also limits executive pay.
The government is insuring all deposits in non-interest bearing bank accounts. This enables companies to manage their payroll and checking accounts without fear of surpassing the limits backed by the Federal Deposit Insurance Corp.
President Bush has also asked Congress for an additional $100 billion of the $700 billion to aid financial institutions.
And the Federal Reserve said it will start buying huge amounts of commercial paper starting Oct. 27, putting a start date to a program announced last week. Commercial paper is a key form of short-term debt that companies rely on for daily operations. (Full story)
The Fed has also pumped funds - possibily trillions of dollars - into the banking system in an effort to get banks to lend again. Central banks around the world have also stepped in to keep the system functioning.
But the credit markets have remained frozen amid the housing market collapse and subprime lending meltdown. Stocks have retreated as the credit crisis has dragged the already strapped economy deeper into what many say is a recession.
Last week was the Dow's worst ever, ending a stunning eight-session selloff that cut 2,400 points and 22% off the blue-chip indicator. The selling erased $2.4 trillion in market value from the Dow Jones Wilshire 5000, the broadest measure of the stock market.
Company news: In earnings news, Johnson & Johnson (JNJ, Fortune 500) reported quarterly earnings that ralllied from a year ago and topped estimates. The health care company also boosted its full-year profit forecast.
Other markets: U.S. light crude oil for November delivery rose 43 cents to $81.62 a barrel on the New York Mercantile Exchange. Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of $147.27 a barrel on July 11.
Gasoline prices fell another 4.3 cents overnight, to a national average of $3.163 a gallon, according to a survey of credit card activity by motorist group AAA. It was the 27th consecutive day that prices have decreased - in the past month alone, they're down more than 63 cents a gallon.
COMEX gold for December delivery tumbled $8.50 to $834 an ounce.
In currency trading, the dollar slipped against the euro and gained against the yen
Monday, October 13, 2008
Sovereign bank confirms talks with Spanish bank
Sovereign Bancorp, Inc. is in "advanced discussions" of a possible combination with Spanish bank Banco Santander, according to a statement released by Sovereign on Monday.
The Wyomissing, Pa.-based thrift Sovereign (SOV, Fortune 500) confirmed the combination talks, but refused further comment.
The Wall Street Journal reported Monday that Santander (STD) was expected to pay nearly $3.81 a share - Sovereign's closing price on Friday - valuing the company at around $2.53 billion.
Sovereign has $79 billion in assets and Madrid-based Santander is the bank's largest shareholder.
In morning trading, Sovereign fell 1.84% to $3.73 a share. The news comes as bank stocks surged on the global response to the financial crisis, with the Dow Jones industrial average (INDU) surging.
Sovereign is grappling with increasing loan losses. Its second-quarter net chargeoff rate more than tripled from levels a year prior.
Sovereign's parent company tapped former Chittenden Corporation CEO Paul A. Perrault to replace Joseph P. Campanelli, effective Jan 3. CFO Kirk Walters is serving in the interim.
Campanelli served as the bank's president and CEO, following the 2006 resignation announcement of his predecessor, Jay S. Sidhu.
Sovereign Bancorp is the parent company of Sovereign Bank, with 750 branches and about 12,000 employees, with a major presence in the Northeast.
The Wyomissing, Pa.-based thrift Sovereign (SOV, Fortune 500) confirmed the combination talks, but refused further comment.
The Wall Street Journal reported Monday that Santander (STD) was expected to pay nearly $3.81 a share - Sovereign's closing price on Friday - valuing the company at around $2.53 billion.
Sovereign has $79 billion in assets and Madrid-based Santander is the bank's largest shareholder.
In morning trading, Sovereign fell 1.84% to $3.73 a share. The news comes as bank stocks surged on the global response to the financial crisis, with the Dow Jones industrial average (INDU) surging.
Sovereign is grappling with increasing loan losses. Its second-quarter net chargeoff rate more than tripled from levels a year prior.
Sovereign's parent company tapped former Chittenden Corporation CEO Paul A. Perrault to replace Joseph P. Campanelli, effective Jan 3. CFO Kirk Walters is serving in the interim.
Campanelli served as the bank's president and CEO, following the 2006 resignation announcement of his predecessor, Jay S. Sidhu.
Sovereign Bancorp is the parent company of Sovereign Bank, with 750 branches and about 12,000 employees, with a major presence in the Northeast.
Sunday, October 12, 2008
Morgan renegotiating bank deal
Morgan Stanley is engaged in high-stakes talks with a big Japanese bank over a multi-billion capital investment in the embattled Wall Street bank, according to an online report Sunday.
Morgan and Mitsubishi UFJ Financial Group were renegotiating the terms of a proposed $9 billion stock purchase, the New York Times reported, citing sources.
According to the Times, Mitsubishi wanted better terms since Morgan's market value has plummeted. Under the new terms, Mitsubishi would still buy 21% of Morgan but in the form of preferred shares that pay a 10% annual dividend. Both firms have been in contact with officials of both governments.
The U.S. Treasury Department, as part of its response to the growing financial crisis, is poised to start implementing a $700 billion bailout plan that may involve direct equity investments in banks. Treasury is not planning on making such an investment in Morgan, according to the Times.
Both firms denied comment to the Times.
Last week, Morgan denied rumors that the deal was falling apart because of a dramatic drop in its stock price as investors grew wary of the firm's prospects. Mitsubishi's $9 billion investment is considered to be a life-saving deal for Morgan Stanley.
Shares of Morgan (MS, Fortune 500) plummeted 22% on Friday on news that rating agency Moody's was weighing a potential downgrade of the long-term debt ratings of the company and its subsidiaries. At one point, shares fell as much as 46%.
Still, despite several reassurances from Morgan Stanley and Mitsubishi that the deal would close as scheduled next week, investors remained jittery about Morgan's fate.
Morgan Stanley and its Wall Street rival Goldman Sachs (GS, Fortune 500) have both been hit hard in the past month or so. The credit crisis already has led to the bankruptcy of Lehman Brothers as well as the sale of another prominent investment bank, Merrill Lynch (MER, Fortune 500), to Bank of America (BAC, Fortune 500). In the wake of the market meltdown, both Morgan and Goldman asked the Federal Reserve last month to be reclassified as bank holding companies. The Fed agreed to the request, which means the two firms are allowed to create commercial banking operations that can take deposits. This move should help Morgan and Goldman raise more capital.
Morgan and Mitsubishi UFJ Financial Group were renegotiating the terms of a proposed $9 billion stock purchase, the New York Times reported, citing sources.
According to the Times, Mitsubishi wanted better terms since Morgan's market value has plummeted. Under the new terms, Mitsubishi would still buy 21% of Morgan but in the form of preferred shares that pay a 10% annual dividend. Both firms have been in contact with officials of both governments.
The U.S. Treasury Department, as part of its response to the growing financial crisis, is poised to start implementing a $700 billion bailout plan that may involve direct equity investments in banks. Treasury is not planning on making such an investment in Morgan, according to the Times.
Both firms denied comment to the Times.
Last week, Morgan denied rumors that the deal was falling apart because of a dramatic drop in its stock price as investors grew wary of the firm's prospects. Mitsubishi's $9 billion investment is considered to be a life-saving deal for Morgan Stanley.
Shares of Morgan (MS, Fortune 500) plummeted 22% on Friday on news that rating agency Moody's was weighing a potential downgrade of the long-term debt ratings of the company and its subsidiaries. At one point, shares fell as much as 46%.
Still, despite several reassurances from Morgan Stanley and Mitsubishi that the deal would close as scheduled next week, investors remained jittery about Morgan's fate.
Morgan Stanley and its Wall Street rival Goldman Sachs (GS, Fortune 500) have both been hit hard in the past month or so. The credit crisis already has led to the bankruptcy of Lehman Brothers as well as the sale of another prominent investment bank, Merrill Lynch (MER, Fortune 500), to Bank of America (BAC, Fortune 500). In the wake of the market meltdown, both Morgan and Goldman asked the Federal Reserve last month to be reclassified as bank holding companies. The Fed agreed to the request, which means the two firms are allowed to create commercial banking operations that can take deposits. This move should help Morgan and Goldman raise more capital.
Saturday, October 11, 2008
Gas down almost 6 cents, nearing $3
Gasoline prices fell nearly 6 cents a gallon, coming within 30 cents of $3, according to a daily survey of credit card swipes.
The decline comes as oil prices get roiled by anxiety over weakening demand and as the end of the economic crisis appears to be quite a ways off.
The average price of unleaded regular fell to $3.291 a gallon nationwide, down 5.9 cents from $3.350, according to the Daily Fuel Gauge Report issued by motorist group AAA.
The price has now tumbled more than 82 cents, or more than 20%, below the record $4.114 set July 17. It's down nearly 38 cents from a month ago, but remains some 53 cents, or 19%, higher from a year ago.
The average price fell below $3 a gallon in Kansas, where a gallon sells for $2.907, on average. Gasoline is highest in Alaska, at $4.097 a gallon, with Hawaii - at $4.051 - the only other state above $4 a gallon.
Gasoline prices had surged during the highly traveled summer season and as a series of hurricanes battered oil refineries in the Gulf of Mexico. But with hurricane season nearly over, prices began their slide.
Oil prices also have been moving sharply lower amid fears that the economic crisis, which has deepened globally, will have a severely adverse effect on demand.
Crude plunged to a 13-month low on Friday, shedding as much as $9 a barrel at one point. Prices for the November contract ended down $8.89 to $77.49 a barrel. That's a far cry from the $147.27 a barrel seen in July.
The survey is conducted for AAA by Oil Price Information Service from credit card swipes at more than 85,000 service stations nationwide.
The decline comes as oil prices get roiled by anxiety over weakening demand and as the end of the economic crisis appears to be quite a ways off.
The average price of unleaded regular fell to $3.291 a gallon nationwide, down 5.9 cents from $3.350, according to the Daily Fuel Gauge Report issued by motorist group AAA.
The price has now tumbled more than 82 cents, or more than 20%, below the record $4.114 set July 17. It's down nearly 38 cents from a month ago, but remains some 53 cents, or 19%, higher from a year ago.
The average price fell below $3 a gallon in Kansas, where a gallon sells for $2.907, on average. Gasoline is highest in Alaska, at $4.097 a gallon, with Hawaii - at $4.051 - the only other state above $4 a gallon.
Gasoline prices had surged during the highly traveled summer season and as a series of hurricanes battered oil refineries in the Gulf of Mexico. But with hurricane season nearly over, prices began their slide.
Oil prices also have been moving sharply lower amid fears that the economic crisis, which has deepened globally, will have a severely adverse effect on demand.
Crude plunged to a 13-month low on Friday, shedding as much as $9 a barrel at one point. Prices for the November contract ended down $8.89 to $77.49 a barrel. That's a far cry from the $147.27 a barrel seen in July.
The survey is conducted for AAA by Oil Price Information Service from credit card swipes at more than 85,000 service stations nationwide.
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