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Oil Prices Retreat For Third Day

By Mark Huffman
ConsumerAffairs.com

April 27, 2006
For U.S. consumers, $3 a gallon may be the "ouch" level, the price at which they take steps to reduce their purchases of gasoline.

After a record run-up in oil prices last week, the price of crude oil on the futures market dipped three straight days this week, falling below $72 a barrel.

U.S. government data shows demand for gasoline appears to be weakening. While consumers are buying more gas that they did at this time last year, the increase is very small. The Department of Energy says demand is up only 0.3 percent over the last four weeks.

Last fall when gasoline prices hit $3 a gallon in the wake of Hurricane Katrina, consumers reacted in a similar fashion. Demand decreased and prices at the pump began to fall.

Energy experts point out, however, that the driving season had ended by then; it's just beginning now.

The average price at the pump is just below $3 a gallon – at $2.91 – though it is considerably higher in some urban markets. Some industry analysts believe we may have reached a plateau for gasoline prices -- at least for now.

With Congress in an election-year panic over gasoline prices, a number of relief measures are being batted around in Washington.

In the Senate, some Republicans advocate sending out $100 rebate checks to all taxpayers to help alleviate high fuel prices, while some Democrats are advocating a 60-day moratorium on federal gasoline taxes.

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