Gas Prices Drop a Penny

May 29, 2007 — -- For the first time in more than a month there is some -- OK, a very, very little amount of -- good news this week for motorists: Gas prices have fallen a penny per gallon.

The average gallon of regular unleaded gasoline is now going for $3.21, according to a weekly government report on retail gas prices released by the Energy Information Administration.

This is the first time in five weeks that prices have moved lower.

Even with the downward move this week, prices are still 12 percent higher than they were during the same period a year ago when motorists were paying $2.87 at the pump. Overall, prices rose $1.04, or 46 percent, during an unprecedented 17-week run-up in retail prices.

Drivers in the Lower Atlantic, Midwest, Gulf Coast and West Coast all saw marginal reductions in prices last week.

Where are prices expected to go from here?

Some experts are beginning to believe that we'll see prices sliding sideways or slightly down in the coming weeks based on the futures market for both oil and gasoline.

Crude prices dropped by more than $2 Tuesday, thanks to improvements in oil-exporter Nigeria and a lot of good news from U.S. refineries.

Newly installed Nigerian President Umaru Yar'Adua used his inaugural address Tuesday to urge an end to the violence that has severely cut into the country's oil production. The nation's largest militant group, which had launched targeted attacks on the country's oil pipelines, said it would consider the president's gesture.

Separately, five big refineries in Texas, Louisiana and Delaware were scheduled to get back up and running this week, which it's hoped, will relieve some of the pressure the market has been feeling with lower-than-average supplies of refined gasoline in the United States at this time of year.

This is all speculation at this point, of course.

If driver demand remains high, and there aren't builds in stockpiles of gasoline over the next few weeks, prices could return to their upward spiral.