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Gas Prices Fall in Northern California, says AAA

21 September 1999

Gas Prices Fall in Northern California, says AAA But Downward Trend May Be Stymied by Higher Oil Prices

    SAN FRANCISCO--Sept. 21, 1999--Northern California gas prices are falling now that the summer driving season is over, AAA reported today.
    "West Coast gas prices have been riding a roller coaster this year," said Paul Moreno, spokesman for AAA of Northern California. "But the current downward slide will eventually be overcome by higher crude oil costs."
    The Northern California average has fallen 9 cents in four weeks to $1.56 for a gallon of self-serve regular unleaded, according to AAA's monthly gas price survey. The nine-county Bay Area average is $1.60, down 6 cents in the same period.
    In Southern California, the average price fell 6 cents in four weeks to $1.45. The average gas price in Los Angeles today is $1.40, says AAA.
    But for most of the country, prices are moving higher, with the national average rising 2 cents a gallon to $1.28 in a month, according to AAA.
    Analysts say members of the Organization of Petroleum Exporting Countries (OPEC) have been holding firm to their 6-month-old commitment to cut production to boost crude oil prices. OPEC's restraint has lifted oil prices to above $24 a barrel, or double the price at the start of this year.
    Analysts say every dollar increase in a barrel of crude oil yields a 2.5 cent per gallon increase at the gas pumps.
    Throughout 1998, oil prices fell when OPEC members over-estimated worldwide demand and their efforts to revise quotas failed.
    One analyst feels today's oil prices are higher than market conditions can justify, and OPEC's newly found cohesiveness may have oil traders over speculating.
    "The fundamentals don't justify the high price (of oil)," said Alan Kovski, an energy analyst with the Kiplinger Washington Letter. "The market seems to be ignoring the facts that oil inventories aren't getting low, nor have ailing Asian economies fully recovered. There's enough oil inventory to deal with an average winter."
    Below are today's city averages in Northern California, with the price change since Aug. 24 in parenthesis.

    -- Chico, $1.44 (down 15 cents in four weeks)

    -- Concord, $1.46 (down 11 cents)

    -- Eureka, $1.68 (down 11 cents)

    -- Fresno, $1.44 (down 13 cents)

    -- Lake Tahoe, $1.67 (down 8 cents)

    -- Modesto, $1.42 (down 11 cents)

    -- Monterey, $1.60 (down 6 cents)

    -- Oakland, $1.59 (down a nickel)

    -- Redding, $1.55 (down 15 cents)

    -- Sacramento, $1.46 (down 14 cents)

    -- Salinas, $1.57 (down 7 cents)

    -- San Francisco, $1.64 (down a dime)

    -- San Jose, $1.58 (down 8 cents)

    -- San Mateo, $1.66 (down a nickel)

    -- San Rafael, $1.64 (down 3 cents)

    -- Santa Cruz, $1.58 (down 6 cents)

    -- Santa Rosa, $1.58 (down 8 cents)

    -- Stockton, $1.42 (down 15 cents)

    In Nevada, gas prices average $1.48, down 8 cents in four weeks. In Utah, the average of $1.40 is up a penny in a month, breaking a record high set last month, according to AAA.
    Established nearly 100 years ago, AAA offers a wide array of automotive, travel, insurance and financial services. The California State Automobile Association serves nearly 4 million members and is the second largest regional affiliate of the national AAA organization.
    NOTE TO EDITORS: A chart showing 12 months of city averages is available.