Gas prices down a little, oil up

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Retail gasoline prices fell in California and nationally for the first time in several weeks, the Energy Department said Monday, but not deeply or early enough to stem what is expected to be another decline in local holiday driving over the Fourth of July weekend. The relief might also be short-lived as renewed violence in oil-rich Nigeria sent crude prices back above $71 a barrel.

At this time last June, the average cost of a gallon of self-serve regular gasoline was $4.573 in California and $4.095 nationally. Both were within range of the all-time record high fuel prices that were recorded last July.

It was the more recent past, however, that seemed to be bothering motorists Monday. California’s average price dropped 2.1 cents a gallon over the last week to $2.984, according to the Energy Department’s weekly survey of filling stations. But that small decline was the first drop since March 23 in a year in which California fuel prices have soared by more than 65%. They ended the year at just $1.81 a gallon.

‘They go up like a rocket and come down like they are on a parachute,’ said Lloyd Haines, an auto repair mechanic as he filled up on $2.85-a-gallon gasoline at a Chevron station on his way to work Monday morning.

That might be one reason why the Auto Club of Southern California was reporting that fewer Southern Californians will travel for the Fourth of July holiday weekend, despite the availability of many travel bargains.

‘It’s not a big surprise to see a travel downturn this holiday given our economy, but the decline is not nearly as pronounced as last year,’ Auto Club spokesman Jeffrey Spring said.

There were doubts Monday about whether the price drop would continue after the reaction of the oil markets to more rebel attacks against oil facilities in Nigeria. Light, sweet crude for August delivery settled at $71.49 a barrel, up $2.33, or 3.4%, on the New York Mercantile Exchange.

Nigeria ranks fifth behind only Canada, Mexico, Saudi Arabia and Venezuela in the amount of crude it exports to the United States. Violence against its oil facilities has been fairly constant, eliminating about 400,000 barrels of day of its 2.4-million export capacity. Some analysts said there was nothing new in the most recent attacks, but others, and oil market investors, felt a new threshold had been crossed.

‘It has definitely escalated,’ said John Kilduff, senior vice president of energy at MF Global in New York. ‘Last week there was an attack on an offshore facility in Nigeria, and those had been considered safe.’

-- Ronald D. White