Oil and gas prices continue to fall
Pump prices fell in California and across the rest of the U.S., and the trend was likely to continue as crude oil tumbled to its lowest levels in four months. The oil collapse came amid new concerns about the European debt crisis and a sense that the global economic recovery was slowing.
In California, the average retail price of a gallon of gasoline fell another 3.8 cents over the last week to $3.903, according to the AAA Fuel Gauge Report. AAA uses daily gas sales transactions from more than 100,000 retail outlets across the U.S., compiled by the Oil Price Information Service and by Wright Express.
Meanwhile, crude futures for July delivery dropped another 45 cents to $92.56 a barrel during trading on the New York Mercantile Exchange. Oil prices have fallen more than 20% since since they closed at $113.93 a barrel on April 29. The slide continued as the European Union again failed to agree on a loan payout to help Greece avoid default on its debts.
Brent crude oil fell dropped 92 cents to $112.29 a barrel on the London-based ICE Futures Europe exchange.
Gasoline price analyst Bob van der Valk said that concern about European debt was the main reason.
"Fear of the 'PIIGS' virus [Portugal, Ireland, Italy, Greece, Spain] has infected the oil markets, and those fears have nothing to do with another 'bird flu' type of virus but with the debt contagion" facing those countries, Van der Valk said. "With each of these countries carrying high debt-to-GDP ratios, financial markets are growing increasingly skeptical that Greece's debt crisis will be successfully resolved."
-- Ronald D. White
Graphic: AAA's 12-month rolling average for retail gasoline prices.