NEW YORK — A stunning sell-off dragged oil prices to their biggest weekly drop ever, and gas at the pump slipped by more than it has in months, giving consumers a rare breather in a year of record fuel prices.
The national average for a gallon of regular fell the most since February, AAA data show, and could ease further in the days to come.
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So is it time to declare the energy bubble popped?
Experts won't go that far just yet.
”It's too early to say we've seen the worst of it,“ said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J. ”We would be Pollyannish if we believe one week represents a trend.“
Still industry experts, who just days ago thought there was more juice left in oil's meteoric run, are reconsidering.
”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.“
Light, sweet crude for August delivery fell 41 cents Friday to settle at $128.88 on the New York Mercantile Exchange — well below its trading record of more than $147 a week earlier.
The average price of a gallon of regular gas fell about a penny for the day, to $4.105, according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel prices dipped three-tenths of a cent to $4.842 a gallon.
Gas fell below $4 a gallon at some Lexington pumps Friday. Some analysts said a nationwide average of $4 or even lower could be in the offing — almost unthinkable in a summer when there has seemed to be no relief at the pump — although they cautioned that there is no guarantee prices will stay low.
”We're going to see some relief from that relentless march higher,“ Kloza said.
Gas may be getting just a bit cheaper, but major changes in how Americans live and drive are already in motion. Some brave traders used the week's pullback in oil prices as a chance to buy barrels that suddenly seemed to be on sale. But oil analysts were advising investors to beware.
”Buying here is an opportunity if you are a deep believer in $200 (a barrel), otherwise we think that caution would be better applied,“ analyst Olivier Jakob of Petromatrix in Switzerland said in a research note. If oil buyers sense that the slide was overdone, you'll probably notice at the pump quickly.
”If (oil prices) rebound, you're going to see a quick reaction at the gas station, because their profit margins are so stretched,“ AAA spokesman Geoff Sundstrom said. ”They may be very fast bringing prices back up.“