...AND LOWER...:

Slump in Oil Likely to Pull Gas Lower: California pump prices hit a 10-month low. Crude futures fall on weak demand and warm weather forecasts. (Elizabeth Douglass, December 28, 2004, LA Times)

California gasoline prices have fallen to their lowest level since February, and steep declines Monday in petroleum futures pointed to cheaper gas ahead.

The statewide average cost of self-serve regular slipped 3.9 cents over seven days to $2.01 a gallon, according to a weekly survey released Monday by the U.S. Energy Information Administration. Ten straight weeks of price decreases have cut 39 cents off the average cost of gasoline in the state.

Though an increasing number of stations are offering regular at $1.99 a gallon — or lower — the averages for Los Angeles, San Francisco and the state as a whole haven't been under $2 since Feb. 16, EIA figures showed. And the new average is 41.5 cents higher than last year.

Nationwide, the average fell 2.4 cents to $1.791 a gallon, 31.3 cents above year-earlier levels, the EIA said.

Analysts attributed the recent decline to weaker seasonal demand for gasoline as well as growing inventories across the country of oil, gasoline and other fuels.

Two additional factors — a new forecast for warmer weather in the East and word that storms and airport glitches cut holiday demand for gasoline and jet fuel — sparked a dramatic sell-off in oil-related commodities Monday at the New York Mercantile Exchange.

"Everything really got hit hard today," said Eric Bolling, an independent trader on the Nymex. "The trend is down … and there's no reason for it to stop right now."