Oil prices rise, but gas prices down 37 percent from year ago

Oil prices surged Monday to boost petroleum prices in the past three trading days to their biggest gains in 25 years.

But a new report still shows gas prices last week fell by the biggest amount so far this year.

In Chattanooga, the average price of a gallon of regular gas fell by another 8.4 cents per gallon to $2 per gallon, according to the gasoline price website GasBuddy.com. According to the website's daily survey of 170 gas outlets in Chattanooga, local gas prices are down nearly 27 cents per gallon in the past month and are $1.15.5 cents lower than the same time a year ago, or a yearly drop of nearly 37 percent in average prices.

Nationwide, GasBuddy said gas prices plunged 12.8 cents per gallon last week to an average of $2.47 per gallon.

"Nationally, gas prices saw their largest weekly drop of the year," Patrick DeHaan, GasBuddy senior petroleum analyst, said Monday. "The national average now stands at its lowest point since April, a fitting way to close out the summer driving season with Labor Day approaching."

Since June 30, oil prices have fallen by more than 20 percent while retail gasoline prices have fallen about half that amount, "so gasoline prices will move lower again this week," DeHaan said.

But oil prices are rising again amid reports that the Organization of Petroleum Exporting Countries may be ready to scale back output. At the same time, the U.S. government cut its estimates of U.S. oil production.

OPEC said in its monthly OPEC Bulletin that it "stands ready to talk to all other producers" to achieve "fair and reasonable prices."

"But this has to be a level playing field," the bulletin said. "OPEC will protect its own interests."

As word spread that OPEC is ready to deal, oil prices rebounded Monday. U.S. crude prices rose nearly 9 percent, or $3.98 per barrel, to close Monday at $49.20 a barrel in New York. Prices are up 28 percent from the low reached last Thursday.