Utah gas prices fall for a 3rd month

The average price for gas in Utah fell for the third month in a row, tumbling 12 cents from the average price in December.

AAA Utah reported Tuesday that the average price for a gallon of regular gasoline was $1.80, a 12-cent drop from last month's report.

"The mild start to winter created a lower demand for heating oil, allowing refiners to build up the reserves of gasoline," said Rolayne Fairclough, AAA Utah spokeswoman, in a prepared statement. "These reserves may be the reason prices are dropping even with the recent decrease in production by OPEC (the Organization of Petroleum Exporting Countries)."

All Utah cities surveyed by AAA reported average price decreases, according to the AAA Utah report. Ogden and Salt Lake City saw the largest decrease, falling 14 cents per gallon. The average price for gas in Ogden is $1.74, AAA Utah reported, while Salt Lake City's average price is $1.72.

In Logan, the average price of gas fell 13 cents in the past month, to $1.86 per gallon. At the other end of the state, St. George motorists saw an 11-cent decline, to an average price of $1.90 per gallon. In Provo, the average price for gas is $1.78, down 12 cents from December.

Utah's price declines were mirrored throughout the region. Idaho reported a 12-cent drop in the average price of gas, to $1.86 per gallon. Wyoming saw a 13-cent decline, to $1.72 per gallon. Colorado's average price of $1.78 per gallon was 8 cents lower than last month.

Nationwide, the average price for gas dropped three cents during the past month, to $1.81.

"While oil analysts cannot agree on the direction crude oil prices will go in 2005, they do agree this will be a volatile year," Fairclough wrote in the AAA Utah report. "Factors to watch are the impact of the economy, politics, worldwide industrial demand and the weather."

Oil futures prices retreated Tuesday afternoon after surging above $49 a barrel earlier in the day — their highest levels since the end of November — amid low temperatures in the United States and fears of supply cuts.

Light sweet crude settled unchanged at $48.38 per barrel on the New York Mercantile Exchange. Heating oil fell 0.71 cent to settle at $1.3438 per gallon. In trading earlier in the day, light sweet crude was as high as $49.50 while heating oil was over $1.39.

Ed Silliere, vice president of risk management at Energy Merchant LLC in New York, attributed the turnaround to traders taking profits from early highs, as well as reports of milder-than-expected temperatures in the coming weeks, which may lessen demand for heating oil.

"People are obviously going to watch the weather," Silliere said.

OPEC ministers are scheduled to meet Jan. 30 to discuss whether additional production cuts may be necessary.

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Contributing: The Associated Press

E-mail: jnii@desnews.com