The three-week slide in crude prices is paying off for the nation's drivers, as pump prices continue to fall ahead of the summer driving season.
Nervous investors have been backing away from oil over concerns about the European debt crisis and worries that the global economic recovery will stall and weak demand won't drain off excess supplies of crude and gasoline. Oil prices fell again on Friday, with Benchmark crude losing 63 cents at $70.17 on the New York Mercantile Exchange.
Average national retail gasoline prices are now a dime per gallon below the 18-month high reached earlier this month. They could fall another 10 cents or more by the Memorial Day weekend, according to Tom Kloza of the Oil Price Information Service.
Pump prices fell 1.3 cents overnight to a national average of $2.827 per gallon. That's down 5.6 cents in the past week. Prices are still 46.5 cents above year-ago levels, but the gap is narrowing quickly. Prices peaked at $2.829 per gallon on May 6.
Kloza said he expects the national average to drop to about $2.77 per gallon by Monday and perhaps to $2.65 to $2.70 by Memorial Day weekend.
"Most parts of the country will see local competition that features prices 10 to 15 cents a gallon below local or state averages," he said. "The market is headed toward those lower prices you see on the occasional street corner."
Prices over the summer could range between $2.50 and $2.75 per gallon, about the same as last summer, he said.
At $2.50 per gallon, a typical driver using 50 gallons a month would spend about $125 per month for gasoline. On average, the nation would spend nearly $1 billion a day for fuel at that price.
Oil prices have dropped about 20 percent since hitting an 18-month high of $87.15 on May 3. On Thursday, the last day of trading for the June contract, prices swung up and down by as much as 10 percent before settling 2 percent lower.
"It shows you how tenuous everything is," said oil analyst and trader Stephen Schork.
Schork said he expects oil prices to bounce a few dollars higher in the near term. If those prices don't hold he would not be surprised to see crude prices head back down toward $65 a barrel or lower.
In other Nymex trading in June contracts, heating oil rose 0.25 cent to $1.9041 a gallon, and gasoline dropped 0.23 cent to $1.9622 a gallon. Natural gas added 0.2 cent at $4.108 per 1,000 cubic feet.
In London, the Brent crude July contact fell 6 cents to $71.78 on the ICE futures exchange.
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