Gasoline prices drop amid demand slump

Pump prices eased in California and around the nation during the last week, a federal report showed Monday, as gasoline demand remained sluggish and oil backed away from the $100-a-barrel milestone.

California motorists paid an average of $3.29 for a gallon of self-serve regular gasoline, down 3.8 cents, according to the Energy Department’s weekly survey of filling stations. The average U.S. pump price for regular gasoline fell 4.1 cents to $3.068 a gallon in the week that ended Monday, the survey found.

The California average was up 70.7 cents a gallon from a year earlier and the U.S. average was up 83.9 cents, the agency said.

Demand for gasoline was little changed at 9.3 million barrels a day in the week that ended Jan. 4, according to the most recent Energy Department data available.

Gasoline fell the most in the Midwest, where it decreased 9.1 cents to $3.01 a gallon.

Among regions surveyed, the West Coast had the highest average price at $3.214 a gallon. Prices there fell 3.3 cents from a week earlier. The lowest average price, $2.949 a gallon, was in the Rocky Mountains, where it fell 0.1 of a cent.

San Francisco was the most expensive city in the survey at $3.395 a gallon, down 3.2 cents. The city with the cheapest gasoline was Denver, where the average price fell 0.1 of a cent to $2.84 a gallon.

The average cost of diesel fuel fell 6.7 cents to $3.459 a gallon in California and dropped 5 cents to $3.326 a gallon nationwide.

In New York futures trading, oil rose $1.51 to $94.20 a barrel as the dollar slipped and tensions between the U.S. and Iran stoked supply concerns. The gains came amid a wider commodity rally and snapped three days of losses for crude triggered by concerns that a potential U.S. recession would cut demand growth. Crude remains below the peak price of $100.09 a barrel reached Jan. 3.