Pump prices drop for first time in months
WASHINGTON (Reuters) - Gasoline prices fell for the first time in 11 weeks, government data showed on Monday, retreating slightly from near the $4-a-gallon level that has made fuel costs a biting economic issue during an election year.
On average, U.S. pump prices declined to $3.939 per gallon, the U.S. Energy Information Administration said. They were down less than a penny, after finishing the week to April 2 at an average $3.941 per gallon.
Pump prices are still at their loftiest seasonal levels ever, potentially putting them on track for record annual highs. Before this week, they had risen every week since late January, alarming U.S. policymakers.
"We are very focused on gasoline prices," U.S. Deputy Secretary of Energy Daniel Poneman told Reuters on the sidelines of a conference in Washington. "We are deeply concerned about the effect on American families and American industries."
The U.S. administration continues to assess whether to release crude oil from its 700-million-barrel Strategic Petroleum Reserve to counter global supply disruptions, including from Iran and South Sudan, which have helped push up the price of crude oil by around 14 percent this year. No decision has been made, Poneman said.
Benchmark U.S. crude futures have fallen more than 4 percent over the past two weeks, and shed 85 cents to settle at $102.46 a barrel on Monday. The drops mean gasoline prices could fall further in coming weeks, analysts said.
Since the cost of gasoline is largely derived from crude, "we may actually see the national average continue to drop", said Patrick DeHann, an oil analyst at GasBuddy.com.
U.S. gasoline demand has been running about 4 percent lower than year-earlier levels, according to an EIA report last week, which also showed domestic crude inventories grew by more than 16 million barrels in the second half of March, the largest two-week stock build since 2001.
Graphic on gasoline taxes across United States: link.reuters.com/dap57s
Graphic on gasoline price components breakdown: link.reuters.com/cap57s
Average U.S. pump prices were 34 cents higher per gallon in the first quarter of 2012 than in the same period of 2011.
"I don't know if $4 a gallon is the tipping point, but I do know that (U.S.) consumers are taking evasive action," said energy analyst Tim Evans at Citi Futures in New York.
"The higher prices go, the more heat politicians feel. And rising prices are the main reason that U.S. gasoline demand will never return to peak levels seen last decade."
Over the past half-decade, U.S. pump prices have typically peaked over the May-to-July period, the driving season when demand is usually highest.
Pain at the pump is more acute in some U.S. regions. Along the West Coast, higher taxes and tougher environmental standards have pushed average prices to $4.203 per gallon, although they fell 3 cents from week-ago levels. Unlike in 2008, when gasoline price spikes eroded U.S. auto sales, consumers have been flocking to new-car showrooms this year and buying more fuel-efficient vehicles.
New U.S. car sales jumped almost 13 percent year-on-year in March.
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