Prices drop below $100 a barrel for 1st time in 5 months

NEW YORK — The worst oil shock since the 1970s has put a permanent mark on the American way of life that even a drop in oil's price below $100 a barrel won't erase.

Public transportation is in. Hummers are out. Frugality is in. Wastefulness is out.

Although oil prices dipped beneath the $100 mark Friday for the first time in five months, it still isn't cheap, and Americans have long memories. They are saddled with debt, high food costs and home prices worth far less than two years ago.

Experts say some relief at the pump is probably coming within weeks after light, sweet crude fell to $99.99 before closing later at $101.18, up 31 cents. But the era of "staycations," four-day work weeks, airline fuel surcharges and costly commutes could be here to stay.

"It's killing me. I drive 50 miles to work everyday and the money (for gas) really adds up," Nick Emken, 28, said as he topped up at a Manhattan filling station Friday where a gallon of regular was going for $3.80.

He pays around $52 to fill up his 2007 Saturn SUV — up from about $30 a year ago — and doubts oil's fall to $100 will make much of a difference.

"Even if gas prices comes down, that will only save me, what, $30 a week? It's still too expensive," said Emken, a financial recruiter from Ocean Township, N.J.

A sustained period of $100 oil should eventually lower pump prices from the current national average of about $3.65 a gallon to within a range of $3 to $3.25 — around a buck lower than the all-time record average of $4.114 a gallon set July 17 when crude prices peaked above $145 a barrel.

Homeowners could also see lower utility bills this winter due to steep drops in the price of heating oil and natural gas.

Still, many drivers are frustrated that pump prices haven't come down as fast as oil. One reason is Hurricane Ike, which steamed into the Gulf of Mexico on Friday and forced a cluster of refineries to shut down, sending wholesale gas prices spiking. Also, refineries are still saddled with more expensive fuel and are having trouble selling it as people drive less. As cheaper oil begins trickling into refineries, pump prices should start to ease some, possibly by October.

"We're not going back to $2-a-gallon gasoline," said Stephen Schork, an analyst and energy trader in Villanova, Pa. "Consumers have to appreciate that the low prices we had before didn't reflect the price of crude, so there will be a limit to how much prices will come down."