Bay State gas prices drop for 7th week
Massachusetts residents planning a Labor Day road trip got some good news with another 8 cent drop in gas prices.
AAA Southern New England in its weekly survey, released yesterday, reported an average price of $3.62 per gallon for self-serve regular. It's the seventh consecutive week of lower prices. Gas prices have plummeted 46 cents since July 7. Prices in Massachusetts are 6 cents below the national average.
Meanwhile, oil prices ended a choppy session slightly higher yesterday, edging back above $115 a barrel after Tropical Storm Gustav formed in the Caribbean.
Light, sweet crude for October delivery rose 52 cents to settle at $115.11 a barrel on the New York Mercantile Exchange. Trading was light heading into the Labor Day holiday, adding to the volatility that has characterized the market in recent days.
Crude traded erratically most of the day in lockstep with a wavering US dollar, which has become the focal point for investors trying to figure out whether crude is going higher or lower. The greenback gained ground against the euro earlier yesterday, fell back, then gained again in a span of a few hours.
A stronger dollar typically makes oil less attractive to investors who buy commodities as a hedge against inflation and weakness in the US currency. But prices were supported by fears that Gustav could threaten oil and natural gas production in the Gulf of Mexico.
"The dollar wants to pull oil lower and the storm wants to pull it higher. It's a bit of a tug of war right now," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago.
Gustav was heading for the Dominican Republic, with maximum sustained winds of nearly 60 miles per hour.
Oil's uncertainty yesterday followed a round of hyper-volatile trading last week.
Analysts said the market's inability to rally in the face of bullish news, such as threats to energy supplies from a conflict between Russia and Georgia and another tropical storm, suggests crude is still in a downward trend. Prices have dropped about $30, or 25 percent, from record trading levels above $147 a barrel, reached last month.