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Oil Prices Fall on US Economy Concerns

U.S. businesses may be waving goodbye to rising gas prices, according to figures from two surveys.

The national average for a gallon of gasoline on Monday was $3.927 – a slip of two-tenths of a penny since Sunday, according to the AAA Daily Fuel Gauge Report, The Los Angeles Times reports. The results echo a similar survey from the Energy Department, the paper reports, suggesting that prices at the pump may have peaked.

Prices dropped in all but one of 23 states in the AAA survey, with an average gas price of $3.90 per gallon or higher. Only eight states now have average prices of above $4 a gallon, the paper reports.

Fuel price analyst Bob van der Valk told the Los Angeles Times that he believes national average pump prices of less than $3 a gallon could be seen this year if the U.S. can get through the summer without a major hurricane or new military conflict in the Middle East.

The drop in prices is the product of concerns over the strength of the economy, reports the Associated Press. Prices in benchmark crude oil fell 52 cents to $101.94 a barrel at one point on the New York Mercantile Exchange following less than encouraging U.S. job figures, the news wire reports. The U.S. economy created 120,000 jobs last month, far fewer than analysts had predicted and half as much as each of the previous three months, according to the AP.

Developments in Iran, OPEC’s second-largest oil producer, have also exerted influence on oil prices, reports Fuelfix. The country has agreed to hold talks with the West, starting Friday, about its controversial nuclear program, easing fears of a prolonged standoff that would further constrict supplies. Any price fall as a result of the talks is directly tied to negotiations continuing or being deemed successful, according to a J.P. Morgan report, the AP says.

Figures released by the Energy Information Administration in January suggest that the U.S. will gradually reduce its dependence on foreign oil, through increased U.S. oil, natural gas and renewable energy production.

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