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California Gas Tops $3 A Gallon--Again

Oil prices slide below $70 even as nationwide average rises

By Mark Huffman
ConsumerAffairs.com

June 15, 2009
Gasoline prices have been an up and down story over the last 12 months and these days, the story is all about "up." After bottoming in December, the retail price of gas has now risen past the $3 a gallon threshold in one state — California.

The average price of self-serve regular Monday in California was $3.006 a gallon, up nearly 50 cents a gallon from a month ago, according to AAA's daily Fuel Gauge Report. It's risen a dime a gallon in just the last week.

San Francisco has the most expensive gasoline in the state, with an average of $3.09 a gallon. It's a relative bargain in Yuba City, at 2.89 a gallon.

This time last year California led the nation in gas prices, but it was a lot worse, with the average price at $4.57 a gallon.

Nationwide, gasoline prices have been steadily rising over the last two months as the price of oil has rebounded from its lows of around $30 a barrel to a high for the year of $73 last week.

However, in a hopeful sign for motorists — in California and elsewhere — oil prices have fallen back below $70. It remains to be seen if this is a temporary market pullback, but some industry analysts believe oil may have reached a top for a while.

According to these analysts, traders have been anticipating a global economic recovery later this year, leading to higher energy demand. However, that recovery doesn't look like such a sure bet.

At the same time, the U.S. dollar has recovered in the last two weeks as traders have rushed to buy higher-yielding U.S. Treasury notes. Since oil is priced in dollars, a stronger greenback is putting downward pressure on oil prices — at least for now.

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