U.S. Retail Gasoline Falls to $2.78 a Gallon, Lundberg Says

By Aaron Clark

Oct. 26 (Bloomberg) -- The average price of regular gasoline at U.S. filling stations fell to $2.78 a gallon as the global economic slump curbed demand.

Gasoline dropped 53 cents, or 16 percent, in the two weeks ended Oct. 24, according to oil analyst Trilby Lundberg's survey of 7,000 filling stations nationwide. Crude oil, which accounts for about 73 percent of gasoline's pump price, has fallen 56 percent from a record $147.27 a barrel reached on July 11.

``There's never been a price crash like this,'' Lundberg said today. Prices have dropped 88 cents over the past 30 days ``thanks to lower crude oil prices and shrinking U.S. gasoline demand.''

AAA, the nation's biggest motoring club, said today that regular gasoline at the pump costs $2.699 a gallon on average, down 34 percent from the record $4.114 reached July 17 and 4.9 percent lower than a year ago.

Crude oil futures on the New York Mercantile Exchange tumbled to a 16-month low as OPEC's decision to slash production by 1.5 million barrels a day failed to ease concern that the global economic slump is curbing fuel demand. Oil dropped $3.69, or 5.4 percent, to $64.15 a barrel on Oct. 24.

Gasoline futures on the New York Mercantile Exchange fell 9.99 cents, or 6.3 percent, to $1.4779 a gallon on the same date.

U.S. motorists drove less in August for a 10th consecutive month even as gasoline prices fell from a record, the Federal Highway Administration said. Vehicle-miles traveled fell 5.6 percent from a year earlier, the agency said Oct. 24.

Gasoline Demand

U.S. gasoline demand fell 6.4 percent last week, a smaller decline than in the previous two weeks, as consumers paid lower prices at the pump, a MasterCard Inc. report showed Oct. 21.

Motorists bought an average 8.986 million barrels of gasoline a day in the week ended Oct. 17, down from 9.605 million a year earlier, MasterCard, the second-biggest credit-card company, said in its weekly SpendingPulse report. It was the 26th consecutive weekly slide.

Gasoline use for the year is down 3.2 percent from a year earlier, the report showed. The average price for regular gasoline has not been this low since Oct. 5, 2007, when it was $2.75 a gallon, according to the report.

The highest average price for self-serve regular gasoline in the U.S. was $3.50 a gallon in Anchorage, Alaska, Lundberg said. The lowest was in Wichita, Kansas, at $2.26 a gallon. On New York's Long Island, the price was $3.02 a gallon.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net.