Gas prices inching down toward $4 a gallon

Gas prices are dropping slowly throughout the East Valley and Arizona and appear to be headed back to the average of $4 a gallon set in June.

“The prices are dropping slightly, but not significantly,” said Linda Gorman, public affairs manager for AAA Arizona. “Nevertheless, they’re heading in the right direction and they’re beginning to stabilize.”

Nationwide, however, prices over the weekend hit a new record high of just a penny shy of $4.11 a gallon, according to AAA, the Oil Price Information Service and Wright Express.

Retail diesel fuel prices are also at an all-time national high of $4.82 a gallon.

But Arizona and the East Valley, except for Scottsdale, continue to stay below the national average.

The decline of the average price per unleaded gallon began about a month ago in various parts of Arizona, but became a unified, statewide drop the week before the July 4 holiday, Gorman said.

For example, the highest statewide record for Arizona hit $4.09 a gallon July 3 and dropped to $4.07 Monday.

In Mesa, the average price dropped from $4.07 to $4.05 Monday. Prices in Tempe on Monday averaged $4.09, about the same as the pre-holiday weekend. In both Chandler and Gilbert, the average price was $4.07 compared with $4.09 in Chandler before July 4 and $4.08 in Gilbert.

Last month, prices in Mesa hit $4.13, Tempe, $4.13, Chandler, $4.12, and Gilbert, $4.13.

Scottsdale continued to bear the highest East Valley prices at $4.12 on Monday. Last month, Scottsdale motorists paid $4.17 a gallon.

Meanwhile, oil prices hovered near $145 a barrel Monday, swinging between gains and losses as traders weighed global supply concerns and a mixed dollar against worries about the health of the U.S. economy.

Light, sweet crude for August delivery rose 8 cents to $145.16 a barrel on the New York Mercantile Exchange. Earlier, the contract dipped as low as $142.49 and rose as high as $146.37.

“There’s a bit of a tug of war going on,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Conn. referring to the buying-and-selling as the price of oil dropped and climbed.

Monday’s oil price swings came as the White House said President Bush plans to lift an executive ban on offshore oil drilling. Such a move will not ease tight global supplies in the short term, however, because a congressional prohibition remains in place and any new wells would take months, if not years, to complete.