Despite War and Uncertainty, Prices Fall 6 Cents

Posted: April 6, 2003 at 6:37 p.m.

CAMARILLO, Calif. (AP) -- Gas prices dropped six cents a gallon nationwide over the past two weeks, the first decrease in four months and the biggest two-week drop since October 2001, an industry analyst said Sunday.

Falling crude oil prices resulting from increased certainty about Middle East oil supplies contributed to the decrease, said analyst Trilby Lundberg.

The average price for gas nationwide, including all grades and taxes, was about $1.70 a gallon on Friday, according to the Lundberg survey of approximately 8,000 gas stations. That was a decrease of 6.03 cents from March 21, the date of the last Lundberg survey.

"Lower crude oil prices since mid-March resulting from reduced uncertainty about Middle East oil supplies are working their way down to the gasoline pump," Lundberg said.

Another factor was the completion of repairs and maintenance at refineries in advance of spring demand, Lundberg said.

It was the biggest two-week drop since the price of a gallon of gas fell 6.6 cents in late October 2001.

Lundberg said gas prices will likely continue to drop in the near term "because world crude oil supplies seem to be more secure now and because U.S. refiners are gearing up to supply plenty of gasoline."

Pre-war oil market jitters have been somewhat calmed because only a few oil fields have been set ablaze in Iraq and the fires were extinguished quickly, Lundberg said. In addition, Venezuela's oil industry has been recovering from a strike and is back to producing about two-thirds of its pre-strike level.

The price of a barrel of oil was $28.62 on Friday, down from $34.93 on March 17 -- the day President Bush gave Saddam Hussein 48 hours to leave Iraq or face war.

The national weighted average price of gasoline, including taxes, at self-serve pumps Friday was about $1.67 for regular, $1.76 for mid-grade and $1.85 for premium.