Gas pump prices fall as oil drops below $99

By The Associated Press

Drivers are starting to see a little relief at the gas pump just ahead of the summer driving season.

The average price for a gallon of regular was $3.955 nationally on Monday. That’s down about 3 cents from Friday, but still nearly 14 cents more than it was a month ago, according to AAA, Wright Express and the Oil Price Information Service.

Motorists in about two dozen states are paying more than the national average, and in 13 states the pump price is above $4 a gallon. Analysts expect prices to continue to fall across the country, perhaps as much as a quarter or more by Memorial Day.

Oil prices rocketed up 34 percent from mid-February through early May on fears that supplies could be disrupted because of uprisings in the Middle East and North Africa. Those fears have begun to abate as supplies continue to flow from the oil-rich region.

Traders also are more optimistic that Mississippi River flooding will not seriously interfere with operations at Gulf Coast refineries. The Army Corps of Engineers opened two massive gates at the Morganza spillway last weekend in an effort to protect Baton Rouge, La., and New Orleans from floodwaters.

In addition, gasoline supplies have remained ample as Americans have cut back on driving because of high gas prices.

Tom Kloza, publisher and chief oil analyst at OPIS, predicted pump prices will range between $3.25 a gallon and $3.75 a gallon by mid-June, with the biggest declines in regions that don’t rely on supplies from Gulf Coast refineries, such as the Midwest and the Rocky Mountains.

He said prices may have reached their high for the year already, if no big hurricanes hit refining centers, and upheavals in the Middle East do not crimp oil supplies.

Michael Lynch, president of Strategic Energy & Economic Research, estimated gas prices will fall to about $3.50 a gallon by summer.

Oil prices also fell Monday as concerns eased about flooding disrupting refineries and supplies.

Traders are also monitoring Europe’s efforts to resolve debt problems in Greece and Portugal. Lynch said there is concern that the financial crisis there may cause demand for crude to fall across Europe.

Benchmark oil for June delivery fell $1 to $98.65 a barrel in midday trading on the New York Stock Exchange. In London, Brent crude for June delivery lost 98 cents at $112.30 on the ICE Futures exchange.

In other Nymex trading in June contracts, heating oil fell 3 cents to $2.9115 per gallon, gasoline futures dropped 8 cents to $2.9903 a gallon and natural gas rose 5 cents to $4.361 per 1,000 cubic feet.

What are you seeing in gasoline prices? Tell us in the comments.