Lundberg Survey: Gas Prices Drop As Oil Production Rises

An increase in crude oil supplies combined with the recovery of U.S. offshore oil production after Hurricane Ivan have contributed to another dip in gas prices over the past two weeks, the Lundberg Survey (search) said Sunday.

Between Nov. 19 and Dec. 3, the combined national price for all grades of gasoline dropped nearly 3 cents per gallon to $1.96, bringing the total decrease since Oct. 22 to 11 cents per gallon, said analyst Trilby Lundberg (search), who publishes the semimonthly Lundberg Survey of 7,000 gas stations across the country.

As of Dec. 3, the average price at the pump for self-serve regular grade gasoline was $1.93, with mid grade at $2.03 and premium at $2.12, she said.

OPEC (search) countries have maximized their oil output, and offshore repairs along the Gulf Coast following Hurricane Ivan have brought back much of the country's domestic oil production, Lundberg said.

As long as there isn't a sudden run on heating oil due to cold weather, and OPEC does not cut its oil supply, "it's very probably that gasoline prices will keep falling," Lundberg said. The members of Organization of Petroleum Exporting Countries are set to meet in Cairo next week.

In California, the average price of self-serve regular, the biggest seller, was $2.20, down from $2.37 two weeks ago. The nation's best bargain for self-served regular gas was in Tulsa, Okla. at $1.73. The highest price was in Honolulu at $2.32.