Retail gas drops as crude prices lower

Pump prices fell every day this week, easing off a summer peak near $2.70 a gallon as storage facilities swelled with unused gasoline.

The national average for gasoline dropped less than a penny Friday to $2.658 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

Oil prices followed stock markets lower on Friday as a wave of speculative buyers looked for direction after the Federal Reserve said the struggling economy would hold back inflation this year.

Benchmark crude for August delivery fell $1.07 to settle at $69.16 a barrel on the New York Mercantile Exchange. In London, Brent prices fell 86 cents to settle at $68.92 a barrel on the ICE Futures exchange.

During the past few months, investors have snapped up crude barrels to protect themselves from a weaker dollar, helping oil prices rise to eight-month highs despite a huge surplus in the U.S.

Political turmoil in Iran and Nigeria also continued to pressure oil prices. Both countries are major oil producers, and a conflagration in Iran could affect millions of barrels of exports in the Persian Gulf.

"Iran is a real wild card," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

"I think we've peaked with gasoline prices at least, but that assumes that nothing major is going to happen over there," he said.

Nigerian militants said they attacked a Royal Dutch Shell wellhead in the southern Delta state in response to a government operation against them, hours after the nation's president offered them amnesty in exchange for laying down their arms.

The militant Movement for the Emancipation of the Niger Delta has been battling for a larger share of the country's oil revenues.

A gallon of gas added an average of 22.4 cents in the past month as prices surged for 54 straight days. That streak came to a close Monday. Prices never got close to breaking the $4 level, as they did last year at this time.

Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore, said the oil price will likely rise to $75 a barrel before drifting to near $60 by the end of the year as investors become disillusioned by a sluggish economic recovery.

Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.