The three-week slide in crude prices is paying off for United States’ drivers, as pump prices continue to fall ahead of the summer driving season.
Nervous investors have been backing away from oil over concerns about the European debt crisis and worries that the global economic recovery will stall, while weak demand will not drain off excess supplies of crude and gasoline.
Oil prices fell again on Friday, with Benchmark crude losing 63 cents at $70.17 on the New York Mercantile Exchange.
Average national retail gasoline prices are now a dime per gallon below the 18-month high reached earlier this month.
They could fall another 10 cents or more by the Memorial Day weekend, according to Tom Kloza of the Oil Price Information Service.
Pump prices fell 1.3 cents overnight to a national average of $2.827 per gallon. That’s down 5.6 cents in the past week.
Prices are still 46.5 cents above year-ago levels, but the gap is narrowing quickly. Prices peaked at $2.829 per gallon on May 6.
Kloza said he expects the national average to drop to about $2.77 per gallon by today, and perhaps to $2.65 to $2.70 by Memorial Day weekend.
At $2.50 per gallon, a typical driver using 50 gallons a month would spend about $125 per month for gasoline. On average, the nation would spend nearly $1 billion a day for fuel at that price.
Oil prices have dropped about 20 per cent since hitting an 18-month high of $87.15 on May 3. On Thursday, the last day of trading for the June contract, prices swung up and down by as much as 10 per cent before settling 2 per cent lower.
“It shows you how tenuous everything is,” said oil analyst and trader Stephen Schork.
Nelson Chukwudi, with agency reports
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Protest: Commissioner Urges Dialogue Over PIA Implementation
Delta State Commissioner for Oil and Gas, Olorogun Vincent Oyibode, has called on the protesting host communities to Otumara Flow Station of the Shell Petroleum Development Commission (SPDC) in Warri South West Local Government Area to engage in a friendly dialogue with the multi-national oil firm over the implementation of the Petroleum Industry Act (PIA).
Oyibode, who made the call while briefing journalists on the outcome of his visit to Otumara Flow Station and the host communities, in Warri, at the weekend, urged the protesting communities of Ugborodo, Deghele and Ugboegungun not to shut down the operations of the SPDC.
According to the commissioner, “the 20,000 barrels per day SPDC facility in Otumara is of great economic importance to the Federal and Delta State Government”.
He said the state government would continue to intervene where and when necessary just as he implored the host communities and SPDC to explore the benefits of dialogue in resolving the disagreement.
Oyibode also stated that the Governor Sheriff Oborevwori-led government was determined to provide an enabling environment for international oil companies and investors in the State.
The commissioner said, “the management team, Ministry of Oil and Gas visited the protestants at the Otumara community where the Flow Station is sited.
“We held discussions with leaders who expressed their concerns. We also advised that the internal wranglings within critical stakeholders over the name for the HCDT should not lead to shutting down of Otumara Flow Station and SPDC’s operations”.
The commissioner insisted that the disagreement between the host communities to Otumara Flow Station and SPDC which has to do with setting up a Host Community Development Trust was a matter that can be resolved amicably, adding that “the Delta State Government is on top of the issue.
“We appeal to the host communities of Ugborodo, Ugboegungun, and Deghele not to shut down the operations at the Otumara Flow Station, while the negotiations continue for a win-win resolution”.
It would be recalled that the protesting communities had earlier called on the SPDC to visit the host communities in line with the PIA 2021 provisíons which empowers communities to set up a Host Community Development Trust Fund (HCDTF).
However, following an alleged illegality of the multinational against the spirit of the PIA by refusing to engage the three communities of the Otumara Flow Station in the Fund, it ignited a protest and upon the expiration of the 48- hour ultimatum gained entry into the facility with the threat of a total shutdown.
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