When oil prices jumped last month, retail prices were slow to follow. Now that crude prices are tumbling, the same thing is happening in the opposite direction.
Gasoline prices have fallen less than a nickel per gallon from their 15-month peak, even though oil prices have dropped nearly 10 percent in the last two weeks.
Gasoline hit $2.7543 per gallon on Jan. 14. On Monday, the national average was $2.709, a drop of 0.4 cents from Sunday, according to AAA, Wright Express and Oil Price Information Service.
The Energy Information Administration will release its weekly retail gasoline price report later Monday. Gasoline prices are 86.4 cents higher than year-ago figures.
Retail gasoline prices should have topped $2.80 when oil got to nearly $83 a barrel earlier this month, said OPIS’ Tom Kloza. Now that crude is below $75, prices should continue to drop toward $2.60, he said.
“We’ll get there,” he said.
Without any catalyst to push oil prices higher, gasoline prices should remain stable through February, Kloza said.
Economic signals have been mixed on whether gasoline and oil consumption are picking up from the depths of the recession a year ago. Signs of strengthening demand could send prices of both higher.
Auto and steel production, for example, show signs of life, but unemployment remains above 10 percent. Wal-Mart Stores Inc. said Sunday that it is cutting about 11,200 jobs at Sam’s Club warehouses.
More information on the nation’s economic health will arrive Friday when the government releases GDP numbers for the fourth quarter.
Oil prices were about flat Monday. Benchmark crude for March delivery rose 12 cents to $74.66 a barrel on the New York Mercantile Exchange. The contract lost $1.54 to settle at $74.54 on Friday.
In other Nymex trading in March contracts, heating oil added 0.97 cent at $1.9513 a gallon. For February contracts, gasoline added 1.21 cents at $1.9778 a gallon, while natural gas futures gained 1.3 cents at $5.832 per 1,000 cubic feet.
In London, Brent crude for March delivery rose 29 cents to $73.12 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.