Gas Prices Drop as Oil Production Surges

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Gas Prices Drop as Oil Production Surges

12/06/2004
CAMARILLO, Calif. -- According to an industry analyst, an increase in crude oil supplies, combined with the recovery of U.S. offshore oil production after Hurricane Ivan, helped gasoline prices dip nearly 3 cents per gallon over the past two weeks, reported the Associated Press.

Between Nov. 19 and Dec. 3, the national average price for all grades of gasoline dropped to $1.96 per gallon, bringing the total decrease since Oct. 22 to 11 cents per gallon, said analyst Trilby Lundberg, who publishes the semimonthly Lundberg Survey of 7,000 gas stations across the country.

As of Dec. 3, the average price at the pump for self-serve regular grade gasoline was $1.93, with mid-grade at $2.03 and premium at $2.12, she said.

OPEC countries have maximized their oil output, and offshore repairs along the Gulf Coast following Hurricane Ivan have brought back much of the country's domestic oil production, Lundberg said.

As long as there isn't a sudden run on heating oil due to cold weather, and OPEC does not cut its oil supply, "it's very probable that gasoline prices will keep falling," Lundberg said. OPEC members are set to meet in Cairo next week.

The nation's cheapest self-serve regular gas was in Tulsa, Okla., at $1.73 per gallon. The highest price was in Honolulu at $2.32.