When oil prices jumped last month, retail prices were slow to follow. Now that crude prices are tumbling, the same thing is happening in the opposite direction.
Gasoline prices in the United States have fallen less than a nickel per gallon from their 15-month peak, even though oil prices have dropped nearly 10 per cent in the last two weeks.
Gasoline hit $2.7543 per gallon on Jan. 14. On Monday, the U.S. average was $2.709, a drop of 0.4 cents from Sunday, according to AAA, Wright Express and Oil Price Information Service.
In Canada, the price of oil averaged C$1.011 per litre compared with $1.016 a week ago and 96.8 cents a month ago, according to price-watching website GasBuddy.com.
The U.S. Energy Information Administration will release its weekly retail gasoline price report later Monday. Gasoline prices in the U.S. are 86.4 cents per gallon higher than year-ago figures.
Retail gasoline prices should have topped US$2.80 when oil got to nearly $83 a barrel earlier this month, said OPIS' Tom Kloza. Now that crude is below $75, prices should continue to drop toward $2.60, he said.
"We'll get there," he said.
Without any catalyst to push oil prices higher, gasoline prices should remain stable through February, Kloza said.
Economic signals have been mixed on whether gasoline and oil consumption are picking up from the depths of the recession a year ago. Signs of strengthening demand could send prices of both higher.
Auto and steel production, for example, show signs of life, but unemployment remains above 10 per cent. Wal-Mart Stores Inc. said Sunday that it is cutting about 11,200 jobs at Sam's Club warehouses.
More information on the nation's economic health will arrive Friday when the government releases GDP numbers for the fourth quarter.
Oil prices were about flat Monday. Benchmark crude for March delivery rose 72 cents to settle at $75.26 a barrel on the New York Mercantile Exchange.
In other Nymex trading in February contracts, heating oil gained 2.42 cents to settle at $1.9658 a gallon, gasoline added 3.51 cents to settle at $2.0008 a gallon. Natural gas futures lost 9.7 cents to settle at $5.722 per 1,000 cubic feet.
In London, Brent crude for March delivery rose 86 cents to settle at $73.69 a barrel on the ICE Futures exchange.
Associated Press writers Pablo Gorondi in Budapest and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.