POSTED: 1:30 a.m. HST, May 24, 2011
Gas prices in Hawaii are dropping faster than the rest of the nation, with some stations in Honolulu dropping below $4 a gallon.
Hawaii no longer has the highest gas prices in the nation. According to AAA's Daily Fuel Gauge Report, the average price for a gallon of regular gasoline in Hawaii is $4.24, about 4 cents lower than Alaska.
In Honolulu, the average price is $4.11, with some stations in competitive areas showing prices below $4 a gallon. The average price has dropped 21 cents in just a week but is still 55 cents higher than last year.
The average price is $4.21 in Hilo and $4.68 in Wailuku.
The national average price for gasoline dropped 11 cents since last week to an average of $3.843 per gallon a few days before the Memorial Day weekend and the unofficial start of the summer travel season. A gallon of regular is 1.3 cents lower than it was a month ago and $1.04 higher than a year ago. Analysts say the national average price could tumble to $3.50 per gallon by June.
Benchmark crude for July delivery lost $2.40, or 2.4 percent, to settle at $97.70 per barrel on the New York Mercantile Exchange. In London, Brent crude gave up $2.29 or 2 percent, to settle at $110.10 per barrel on the ICE Futures exchange.
Crude dropped as the dollar rose against other currencies. Oil is priced in dollars, and it tends to fall as the dollar rises and makes crude more expensive for investors holding foreign money. The U.S. Dollar Index, which measures the dollar against other major currencies, rose 0.7 percent amid concerns about Europe's debt crisis.
Meanwhile, Platts, the energy information arm of McGraw-Hill Cos., reported Monday that the rapid rise in China's oil consumption slowed in April. China consumed 9.37 million barrels per day in April, up 8.3 percent from the same period last year, but down from the 10 percent average growth in the first quarter of this year.
A decelerating economy and high oil prices were "denting end-user demand" in China, Platts said. China is the second biggest petroleum consumer in the world behind the U.S.
Other government and industry data show that gasoline demand in the U.S. has declined for two months as pump prices rose above $4 per gallon in many states. The Platts report suggests that international gasoline demand also has been hurt by higher prices.
"You have to ask how unrealistic it's been that prices have been pushed up to this level," analyst and trader Stephen Schork said. "There could be further weakness in this market."