OiL FUTURES: Crude prices drop, gas prices remain high

Higher crude oil prices and lower inventories will keep upward pressure on gasoline prices this week, Tennessee's Daily News Journal reported.

"A recent government report indicates U.S. unemployment jumped to a two-year high and may result in a slowing economy later this year," Randy Bly, director of community relations for AAA Auto Club South, told the newspaper. "In addition, the dollar fell again against the euro with news that the Federal Reserve may cut borrowing costs in the near future -- an action that tends to promote oil rallies and keep crude prices high."

Crude hit $100 a barrel Jan. 2 but has since dropped amid warm-weather forecasts, the slowing U.S. economy and concern over recession. Crude oil settled Friday on the NYMEX at $97.91 per barrel and has since dropped another dollar. Still, some analysts are betting prices will hit $200 before then end of 2008.

Nationally, regular unleaded gasoline is an average $3.104 per gallon compared with $2.32 per gallon on average a year ago, the paper said.

Via: United Press International

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