Gas prices likely to fall rest of year

Editor's Note: In December of 2007, gas prices fell 7¢ in North County.

See this story as it originally appeared in the North County Times.

By: BRADLEY J. FIKES - Staff Writer

NORTH COUNTY -- Charles Langley, the local surveyor of gasoline prices whose outlook is often gloomy, has put on a somewhat happier face for the end of the year. Local gas prices are likely to decline in the short term, he said.

Gas at $4 a gallon is not around the corner, said Langley, who surveys gas prices for the North County Times. In early November, he said gas prices were getting close to breaching that record.

"It appears that oil is overpriced and that market fundamentals cannot support gas prices at $4 a gallon in the first half of 2008," said Langley, a consumer advocate with the Utility Consumers Action Network, a San Diego-based watchdog group.

After coming within a eyelash of $100 a barrel in November, oil prices have dropped more than $10 a barrel as the Organization of Petroleum Exporting Countries increased output as demand slid in the wake of high prices.

Nationwide, gas prices fell 2 cents over the weekend to a national average of $3 a gallon, according to the American Automobile Association and the Oil Price Information Service. Gas prices have fallen nearly 11 cents from levels reached in mid-November, when oil appeared set to hit $100 a barrel.

It's not quite as cheerful a story in North County, where prices are substantially higher than the national average, Langley said. On Saturday, gas sold for an average $3.28 per gallon in North County, according to Langley's survey.

"We believe that consumer demand is down significantly, and that it is forcing lower refinery profit margins," Langley said. "However, this is not necessarily good news because while lack of demand has forced prices down, North County gas prices are still within striking range of breaking the all-time record of $3.45 a gallon on May 5.

"The ugly truth is, that the current price is the highest price we've ever paid in any December in history for North County. Historically, this is often the lowest price of the year."

Just a year ago, on Dec. 13, a survey listed the North County average as $2.54 per gallon, 74 cents lower than on Saturday.

Several recent reports have suggested domestic demand for oil and gasoline is falling even as OPEC is boosting production. Total production by OPEC rose to 31.15 million barrels a day in November, up 40,000 barrels a day from October, according to Platts, the energy research arm of McGraw-Hill Cos.

Analysts surveyed by Dow Jones Newswires predict the government will report on Wednesday that domestic oil inventories rose last week.

Light, sweet crude for January delivery fell 42 cents to settle at $87.86 a barrel on the New York Mercantile Exchange.

The Associated Press contributed to this story.

-- Contact staff writer Bradley J. Fikes at (760) 739-6641