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Gas prices extend decline: 5 days and counting
09/22/2008

Gas prices extend decline: 5 days and counting

Fast cars in a slow economy

Prices remain below the key $4-a-gallon mark but are still 33% above year-earlier levels.

NEW YORK -- Gas prices decreased for the fifth day in a row, according to a nationwide survey of credit card swipes at gasoline stations.
 
The average price of unleaded regular dropped 1.8 cents to $3.739 a gallon, from $3.757 a gallon, according to the survey released by motorist group AAA.
 
Prices have stayed below the key $4 level for some time now but they are still much higher from a year ago, when gas was selling for less than $3 a gallon. Current prices are about 33% higher from a year earlier at this time.
 
Yet, drivers can take some comfort in the fact that prices are still 37.5 cents, or 9.1%, down from the record high price of $4.114 a gallon set on July 17.
 
Gas prices had been moving higher following the devastation left behind by hurricanes Ike and Gustav. But now that hurricane season is more than halfway done and the high summer driving season is over, it remains to be seen if the downward trend for gas prices will continue.
 
More than 30 refineries, which convert crude oil into usable gasoline, had shut down or were operating with reduced capacity in the Gulf region after the storms hit.
 
As of early Monday, roughly 89% of crude oil production remained shuttered and 75% of natural gas output was down, according to the U.S. Department of Energy Web site. Twenty-six major natural gas pipelines in the Gulf continue to report shutdowns or reduced production.
 
Lower oil prices have also helped lower the cost of retail gas. Crude has been moving lower since mid-July amid weakening demand, losing more than a third of its value since it reached a record of near $150 just two months ago.
 
But oil prices rallied back above $104 a barrel Friday amid growing optimism that the government's various rescue plans will help ease the credit crisis currently stifling the U.S. economy. Crude for October delivery was up $1.44 to $105.97 early Monday.
 
Meanwhile, only three states now continue to report gas prices above $4 a gallon: Alaska, Hawaii and Illinois. Alaska continues to be the state with the most expensive gas prices, at $4.297 a gallon. The cheapest gas can be found in New Jersey, where gas cost $3.458 a gallon, according to AAA's Web site





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