Gas prices fall 7 cents. But is the decline over?
Gas prices hit $3.41 a gallon, down 14 percent from this year's peak. But rising oil prices suggest the decline in gas prices will end.
U.S. consumers have caught a break from the slowing economy as gasoline prices extended their steep three-month decline, but the cost of filling the tank may soon head back up, a widely followed survey said on Sunday.
The Lundberg Survey said the national average price of self-serve, regular gas was $3.41 on July 13, down from $3.478 on June 22, and from $3.615 a year ago.
That decline was the sixth straight in the survey of 2,500 gas stations, which comes out every other or every third week.
Gas prices have fallen 14 percent from a recent peak of $3.967 a gallon set on April 6. The record high is $4.112 set on July 11, 2008.
Trilby Lundberg, who conducts the survey, in an interview said prices may soon enter a period of "comparative stability," reflecting crude oil price trends and the summer driving season.
She added that there is "no strong reason" to expect gas prices to keep hurtling toward $3 a gallon.
"The retail price may well have bottomed out," Lundberg said. "Crude oil prices turned around during the period, and we are in our seasonal period of higher consumption. Lower prices are also an incentive for consumers to drive more, including to work."
There are countervailing forces that might tend on their own to push prices lower or higher.
The U.S. dollar this month has risen to a two-year high against the euro and a nearly two-year high against a basket of currencies. A rising dollar often causes the price of dollar-denominated commodities such as oil to decline.
On the other hand, the price of U.S. crude, which Lundberg said "dictates more than any other factor what happens to gas prices," has risen nearly 13 percent from its recent trough on June 28, settling Friday at $87.10 per barrel. That price had been as high as $110.55 as recently as March 1.
Gas prices could also rise if Iran follows through on its renewed threat to close the Strait of Hormuz, through which 40 percent of global sea-borne oil exports passes, in retaliation for Western sanctions on crude exports.
Diesel fuel prices also fell in the latest three-week period, dropping to $3.7272 from $3.7783.