Gas prices continue to drop with crude falling below $60

Stations in Kansas City, Mos., are charging $1.61; in Salem, Ohio, gas costs $1.84.

STAFF/WIRE REPORTS

HOUSTON — Retail gasoline prices dipped for a 17th week since July 4, falling below $2 a gallon in a number of states and approaching $1.50 at some service stations.

While consumers, worried about a weak job market and slumping investments, are grateful for the price relief, economic reports increasingly suggest they’re hanging onto whatever savings they see at the pump.

Oil prices hit a 20-month low Tuesday as Wall Street offered yet more evidence that consumers have gone into hiding.

Retail gasoline prices fell overnight to a national average of $2.22 a gallon, dragged down by the falling price of crude, which now costs 60 percent less per barrel than it did in mid-July. The average price for regular unleaded gasoline has fallen nearly 32 percent in the last month.

Light, sweet crude for December delivery fell $3.08 to settle at $59.33 a barrel on the New York Mercantile Exchange, the lowest closing price since March 2007. Crude dipped a dollar lower in earlier trading.

The latest decline in crude prices comes two days ahead of a report from the International Energy Agency, which some analysts expect will cut its 2009 oil demand forecast for the third consecutive month.

Gasoline fell again overnight, dipping 2 cents to a national average of $2.22 for a gallon of regular unleaded, according to auto club AAA, the Oil Price Information Service and Wright Express. The average price could be headed to $2 a gallon nationally by year’s end, AAA has said.

The Mahoning Valley’s average price for regular gas remained at $2.13 Tuesday, unchanged from the day before, AAA said. The average price statewide was $1.96 Tuesday.

The price already has fallen well below $2 in some places. In Missouri, the Web site GasBuddy.com, where consumers post prices they spot, said a few stations in the Kansas City area were charging $1.61 for regular. Drivers were paying only slightly higher in parts of Oklahoma, Iowa and Texas.

Local drivers reported prices of $1.84 in Salem and $1.95 in Hubbard.

Oil prices fell despite signs that OPEC members are going ahead with production cuts agreed to at an emergency meeting in Vienna, Austria, last month.

Many analysts are expecting another cut by the Organization of Petroleum Exporting Countries, which will meet on Dec. 17 in Oran, Algeria.

The prime minister of Qatar said Tuesday that “fair” oil prices of between $70 to $90 per barrel would ensure that expensive oil exploration could continue, avoiding rapid price surges in the future.

Sheikh Hamad Bin Jassim Bin Jabr Al-Thani said that while oil prices below $70 a barrel may seem like a gift to consumers, it could trigger price spikes in the near future when demand picks up.

But for now it is waning energy demand, not the supply controlled by OPEC, that is dominating crude prices.