Gas Prices Continue to Drop

Gas prices continued to fall over the past two weeks, dropping nearly 5 cents nationwide, but the market is bottoming out and prices could start to rise, according to analyst Trilby Lundberg.

The average price for a gallon of gasoline, including all grades and taxes, was $1.46, down 4.73 cents per gallon since July 13, according to the Lundberg Survey of about 8,000 stations nationwide.

Gas prices have tumbled since peaking on May 18 at $1.76, thanks in large part to refiners overproducing to compensate for tight supplies in the spring, Lundberg said. Now demand is catching back up with supply.

Wholesale prices hit bottom in some locations while prices at the pump rose in some of the Midwest. In Chicago, the price of self-serve regular gas went up 5 cents over the past two weeks, from $1.40 to $1.45.

However, Lundberg said prices will continue to fall slightly in many locations on the short-term, and when they do creep back up the increases will not be dramatic. "There were all these scare stories about $3 gasoline. That was alarmist, silly malarkey from the very beginning," she said.

Prices remain significantly lower than they were a year ago. On July 21, 2000, the average price for a gallon of gas, including all grades and taxes, was $1.61, Lundberg added.
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