Gasoline prices slip as oil keeps sliding

NEW YORK - Gasoline prices pulled back a bit yesterday as another slide in oil capped crude's biggest one-week drop in more than three years.

Gasoline dropped by an average of nearly a penny at filling stations across the country.

In Philadelphia and its four suburban counties in Pennsylvania, it also fell by a penny yesterday, to an average of $4.14 a gallon, AAA Mid-Atlantic said. The price in the three suburban counties in South Jersey dropped two cents yesterday to an average of $3.93.

That's little consolation when the price remains up 38 percent over the last year in the five Pennsylvania counties and 41 percent in the three South Jersey counties.

But if crude prices hold at current levels or head even lower, drivers may see further relief at the pump. Industry experts who just days ago thought the market's meteoric run to one record after another this year still had legs are growing cautious. Some say last week's high above $147 a barrel may be the last record the market sees - for now.

"If this is not the bubble's implosion, than it's a reasonable facsimile," analyst and trader Stephen Schork said in his daily market commentary. "Time will tell. Nevertheless, for the time being we no longer care to hold a bullish view."

Oil's drop may have an immediate effect, as gas station owners, seeking to get drivers back, consider a preemptive cut in price.

Nationwide, the average price for a gallon of regular fell to $4.105, down nearly a penny, according to AAA, the Oil Price Information Service and Wright Express. Diesel prices also eased, dipping three-tenths of a cent to $4.842 a gallon.

"We could see the nationwide average drop down to $4 or perhaps lower than that. And we think that could happen relatively quickly . . . within the next couple of weeks," said AAA spokesman Geoff Sundstrom.

Light, sweet crude for August delivery fell 41 cents yesterday to settle at $128.88 a barrel on the New York Mercantile Exchange.

The decline in gas prices wasn't much of a surprise, considering that a barrel of oil is now more than 10 percent cheaper than it was at the start of the week. Perhaps more stunning is the market's inability to spark a larger rally.

Consumers have been jolted repeatedly by soaring gas prices, and immense changes in how they live - particularly American consumers - are already in motion.

Car buyers have been fleeing to more fuel-efficient models as gas prices have climbed beyond $4 per gallon. U.S. sales of pickups and sport-utility vehicles are down nearly 18 percent this year through June, while sales of small cars are up more than 10 percent.

While slashing production of more-profitable trucks and SUVs, automakers have been scurrying to build their most fuel-efficient models faster. Toyota Motor Corp., which hasn't been able to keep up with demand for its 46-miles-per-gallon Prius hybrid, said last week that it will start producing the Prius in the United States and suspend truck and SUV production to meet changing consumer demands.

Ford Motor Co. and General Motors Corp. also have announced plans to increase small-car production.