NEW YORK — Just shy of $4 a gallon, average US pump prices are about to start falling and could hit $3.50 by summer.
You probably won’t see a change at the gas station this weekend. But relief will come soon because oil prices fell 15 percent this week, the steepest decline in 2 1/2 years. Oil hit a two-year high of $114.83 in Monday trading. It closed yesterday at $97.18.
The plunge was part of a sharp sell-off across commodities this week. Analysts said investors — demonized as “speculators’’ by some market watchers — got nervous that oil, metals, and grains had risen over the past few months to unrealistic heights.
Their rush to sell knocked silver prices down 28 percent, sugar down 13 percent, and natural gas down 10 percent.
While analysts cited reasons specific to each commodity, they had one common explanation for the pullback: The strengthening US dollar.
Commodities such as oil and silver are bought and sold in dollars. When the dollar is weak, those commodities look cheaper to holders of foreign currency so they buy. Conversely, when the dollar rises, commodities look more expensive. So they sell.