Try Paying Over $6 For Your Gas

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Gas prices at pump fall an average 3 cents

The nation's average gasoline price fell 3 cents a gallon in two weeks, continuing a drop that began last month, industry analyst Trilby Lundberg said yesterday.

The average retail price for all three grades Friday was $2.24 per gallon, down from $2.27 April 22, said Lundberg, who publishes the Lundberg Survey of 7,000 gas stations. Self-serve regular was an average 2.21 a gallon.

Prices are still more than 40 cents higher than they were at the start of 2005, Lundberg said.

She said the recent relief at the pump was due to an increased supply of both crude oil and gasoline and the completion of some maintenance projects that had reduced refinery capacity. She said those factors had offset a spike in consumption that usually occurs in spring and summer.

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- Oil surged to a record $68 a barrel Thursday, hounded by supply concerns due to a growing threat to oil facilities from an Atlantic storm and a large fall in U.S. gasoline stocks.

U.S. light crude for October delivery rose 18 cents to $67.50 a barrel by in early morning electronic trading, after rising as high as $68, the highest since U.S. crude futures started trade in 1983. London Brent crude was up 34 cents to $66.35.

Dealers are concerned about a thin stock cushion after a rash of disruptions and tensions in oil-producing countries cut crude output and propelled prices to a series of record peaks.

Gasoline stockpiles in the United States, the world's top oil consumer, registered a greater-than-expected slide of 3.2 million barrels in the week to Aug. 19, widening the supply gap from a year ago, the government's Energy Administration Agency said.

Stocks of the auto fuel have contracted for eight straight weeks, led by higher demand as the peak driving season has almost two weeks to run its course.

Compounding the fears, a tropical storm is swirling towards Florida, threatening U.S. oil and gas production facilities in the Gulf of Mexico.

"The market is really starting to get unhinged," said John Brady at ABN AMRO in New York. "The majority can be attributed to the storm, and some geopolitical concerns as well."

Tropical storm Katrina, which formed in the Bahamas on Wednesday, was moving on a path that would likely cut across southern Florida and into the Gulf of Mexico later this week, the National Hurricane Center said.

The storm was expected to hit the Miami area by Friday as a weak hurricane moving slowly across the state into the Gulf.

Market participants fear the storm may threaten oil and gas producing areas in the central and eastern Gulf of Mexico, where the United States derives between 20 and 25 percent of domestic crude and natural gas production.

The unusually active Atlantic hurricane season has produced 11 named storms and could culminate in as many as 21 tropical storms and 11 hurricanes, forecasters have said.