By Chris Kahn Associated Press
NEW YORK — Gasoline prices have dropped 5 percent since peaking last month.
The national average fell to $3.739 per gallon on Thursday, down nearly 20 cents since hitting a high of $3.936 on April 6. And compared with a year ago, regular unleaded is 21 cents cheaper.
Gasoline prices are falling as concerns about the economy pull down the price of oil.
Benchmark U.S. oil has fallen 6 percent since April. Brent crude, which sets the price for oil imported into the U.S., has dropped by 8 percent. On Thursday, Brent continued its descent, falling by 18 cents per barrel to $113.02. Benchmark U.S. oil rose slightly, adding 42 cents to $97.23.
Analysts say oil prices should also keep falling this summer if supplies grow as expected. OPEC increased oil production by 320,000 barrels per day in April, according to Platts, the energy-information arm of McGraw-Hill Cos. OPEC’s biggest producer, Saudi Arabia, plans to crank up production even further in an effort to push oil prices lower.
Declining oil prices could take some pressure off a world economy that’s struggling to grow. Already, the decline in U.S. gasoline prices over the past month amounts to a savings of about $2 to $3 per fill-up. That’s enough to cut American gasoline spending by $73.1 million per day.
Meanwhile, the price of natural gas increased by 3.6 cents to $2.503 per 1,000 cubic feet, the highest since the end of February. Natural gas prices have rebounded from 10-year lows as the industry shuts down production operations across the country. U.S. supplies still climbed last week, according to the government’s latest report. But the increase was smaller than analysts expected.
“Producers are finally pulling back” on production, independent trader and analyst Stephen Schork said. “It’s making a difference.”
In other futures trading, heating oil lost 1.14 cents to $2.9877 per gallon and wholesale gasoline fell by nearly a penny to $3.0169 per gallon.
Follow Chris Kahn on Twitter at http://twitter.com/ChrisKahnAP