Prices at the Pump Keep Dropping; Oil Falls Due to Weakening Spanish Economy
May 29, 2012
Diesel and gasoline prices have declined for the sixth straight week, according the Energy Information Administration's weekly fuel update. Oil prices fell due to concerns over Spain's weakening economy and large debt.
U.S. Diesel prices are down an average of 5.9 cents this week to $3.897 per gallon despite earlier forecasts that prices would rise closer to Memorial Day weekend. Diesel prices haven't been this low since early February. All U.S. regions experienced price decreases, and California saw the largest with a 7.5-cent drop to $4.228
Gasoline prices also fell this week by an average of 4.5 cents to $3.669 per gallon. All regions experienced decreases except the West Coast less California, where prices were unchanged. Gasoline prices are down 12.5 cents from a year ago.
Oil fell after ratings agency Egan Jones downgraded Spain's debt due to widespread unemployment and a weakening economy, which will make it tough for Spain to repay its debts.
Benchmark U.S. crude ended the day down 10 cents at $90.76 per barrel in New York. Brent crude, which helps set the price for oil imported into the U.S., lost 43 cents to finish at $106.68 per barrel in London.
Analysts are concerned that Spain and other weakening European economies could bring the European Union into recession this year, which could negatively affect trading partners such as the U.S. and China and slow global demand for oil.
To see the EIA's weekly fuel update, click here