Pump prices lower ahead of Memorial Day weekend - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Pump prices lower ahead of Memorial Day weekend

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Gasoline pump prices are shown at a gas station Monday, May 2, 2011, in Portland, Ore. Gasoline pump prices are shown at a gas station Monday, May 2, 2011, in Portland, Ore.

Drivers getting an early start on the Memorial Day weekend are pulling out of gas stations with a little more cash in their pockets.

The national average for unleaded regular gasoline was $3.81 a gallon on Thursday. That's 9 cents less than it was a week ago, according to AAA, Wright Express and the Oil Price Information Service.

The most common gas price in the country is even less — about $3.70 a gallon. That's down 10 cents from Wednesday, according to Fred Rozell, retail pricing director for OPIS.

Consumers in California, Washington, Illinois and five other states paying the highest pump prices — between $3.91 and $4.28 a gallon. The cheapest prices — between $3.57 and $3.69 a gallon — can be found in Wyoming, Arizona, parts of the Midwest and the South.

Pump prices are expected to drift lower through the holiday weekend. Oil prices are down about 12 percent since the beginning of May. Retail gas prices have fallen only about 3 percent.

"There's a lot of room between what the retailers are charging and wholesale prices, so we should see that continue to creep down," Rozell said.

AAA predicts nearly 35 million Americans will travel 50 miles or more from home this Memorial Day weekend, a slight increase from a year ago. They are expected to spend less on things like hotel rooms and restaurants because of gas prices. Retail gas prices are the highest they've been since August 2008. Even with the recent drop, the national average is still $1.07 per gallon more than last Memorial Day weekend.

Oil prices fell on Thursday after the government offered fresh signs of slower economic growth. The Commerce Department confirmed that the economy grew at an annual rate of 1.8 percent in the first quarter. The government cited high gasoline prices, weaker-than-expected consumer spending and government budget cuts as reasons for the sluggishness. Consumer spending accounts for about 70 percent of all economic activity.

Also the Labor Department reported that more people applied for unemployment benefits last week.

Tom Bentz, analyst at BNP Paribas Commodity Futures, said oil traders watch every report for evidence of how the economy is faring. If the news is good, oil prices tend to rise on hopes that demand will improve. If the news is disappointing, prices fall, he said.

Benchmark oil for July delivery fell $1.09 to settle at $100.23 per barrel on the New York Mercantile Exchange. In London, Brent crude rose 12 cents to settle at $115.05 on the ICE Futures exchange.

Natural gas prices dropped after the Energy Department said supplies continued to grow, rising more than analysts expected last week. Gas held in underground storage in the lower 48 states totaled 2.024 trillion cubic feet for the week ended May 20. That was 1.3 percent below the five-year average.

Natural gas for July delivery fell 6.3 cents to settle at $4.300 per 1,000 cubic feet on the Nymex.

In other Nymex trading heating oil picked up 0.11 cent to settle at $2.9934 per gallon and gasoline gained 2.07 cents to settle at $3.0074 per gallon.

Copyright 2011 The Associated Press.

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