Retail gasoline in the U.S. dropped by the most in 13 months this week, dragged down by crude futures trading below $80 a barrel, the Energy Department said.
The average price for regular gasoline fell 9.6 cents, or 2.7%, to $3.437 a gallon from a week earlier, the largest weekly drop since May 23, 2011, according to data compiled by the U.S. Energy Information Administration. The motor fuel was 3.8% below year ago levels, a report posted on the agency’s website yesterday shows.
Retail gasoline is down 13 percent from this year’s peak of $3.941 a gallon on April 2, trailing crude prices that are headed for the biggest quarterly decline since the final three months of 2008. Oil is trading below $80 a barrel for a fourth day in New York on concern that European Union leaders will fail to check the region’s debt crisis.
“We’ve seen the largest drops in crude oil prices in a long time,” said James Williams, president of energy research firm WTRG Economics in London, Ark. “If crude remains where it is, gasoline could go down another nickel to a dime. If crude keeps going down, we could see $3 gasoline nationwide by September.”
Oil for August delivery was at $79.35 a barrel in electronic trading on the New York Mercantile Exchange. Futures are down 20% this year and have fallen 23% since the end of March.
Average U.S. gasoline demand for the four weeks ended June 15 dropped 5% from a year earlier to 8.85 million barrels a day, Energy Department data shows.
Retail regular gasoline fell the most from a year earlier on the U.S. Gulf Coast, where prices dropped 7.2% to $3.195 a gallon, the Energy Department’s report shows. The motor fuel in the Rocky Mountain region increased 1.8% from a year earlier to $3.634 a gallon, the agency said.
The Energy Department conducts a telephone survey of about 800 retail gasoline outlets across the U.S. each Monday to post weekly gasoline prices as of 8 a.m. local time that day.