The average price of a gallon of gas fell a penny a gallon during the last week. The move isn't dramatic, but it does reverse weeks of steadily higher prices at the pump. This week's drop in prices could signal there is some relief on the way, according to fuel industry analysts.
Some of the price stability can be tied to oil prices. The cost of crude oil dipped below $100 a barrel for the first time in months at the end of last week, according to the chief oil analyst for the Oil Price Information Service, Tom Kloza. However, he said the price of oil doesn’t always paint an accurate picture.
"It's a misleading sign. I mean, I think crude oil was very much over bought and over hyped and money was chasing money in the crude oil market as it was in many other resource commodities," said Kloza.
This year's peak price for oil has probably been reached, said Kloza, and he expects retail prices to gradually decline. The only thing that would keep that from happening is a major disruption in the oil supply pipeline.
"It is a phenomenon I've refereed to over the years as Petro-noia,” said Kloza. “People fear this will be the year where there is not enough crude or there's not enough refining capacity. We have plenty of refining capacity. We have plenty of crude."
The Utility Consumer's Action Network tracks retail prices at hundreds of local gas stations. Their survey has already found a couple of San Diego County filling stations selling regular for less than $4 a gallon.
"I think and I'm hoping that really we've seen the peak price for this year, said UCAN's Charles Langley.
That comment came with an air of caution. Langley said the flooding along the Mississippi River or a major hurricane in the Giulf of Mexico could yet disrupt the flow of refined fuel from the gulf region. If that happens, California refineries could to sell their fuel out of state, pinching supplies here, and pushing prices up.
