By Johnny Jackson
Energy analysts point to the financial crisis in Greece as a major component driving crude oil prices down, and possibly gas prices in the short term.
"There is a more pessimistic outlook," said Neil Gamson, economist with the Energy Information Administration. "The economic uncertainty in western Europe helped push crude oil prices down a lot."
Gamson said crude oil prices plunged incrementally by more than $10 over the course of last week, closing Friday at around $75 per barrel on the New York Mercantile Exchange (NYMEX). Prices rose to about $77 per barrel on the NYMEX late Monday, according to Bloomberg.com.
"It's hard to say what it's going to do," said Gamson, adding that the reduction in crude oil prices over the past week have correlated to price declines at the pump.
AAA reported the crude oil price plunge brushed back average national gas prices from $2.91 per gallon of regular unleaded Sunday, to $2.90 on Monday.
Average gas prices froze at $2.85 per gallon of regular unleaded in metro Atlanta, which had been climbing by more than a nickel per gallon each week, according to AAA's Daily Fuel Gauge Report.
"At some point, this was bound to happen; it was only a matter of time," said AAA Spokeswoman Jessica Brady. "We've seen a bull market keep the price of crude well above sustainable levels the last several weeks, and last week Greece's debt issues weighed too heavy.
Brady said Greece's financial crisis is getting worse, and is expected to affect other European countries, slowing the global economic recovery.
"A $140 billion aid package to avoid a default by Greece failed to prevent bond yields from rising, and increased borrowing costs for countries like Spain and Portugal," she said. "At the same time, U.S. stockpiles of crude oil grew more than 2.7 million barrels, increasing supply to more than 360 million barrels."
Brady said the strength of the U.S. dollar should help keep the price of crude at bay, as consumers may continue to experience drops in retail gas prices for the short term.