Gas prices see largest two-week drop in two years

CAMARILLO, Calif. (AP) -- Retail gas prices slid more than 10 cents per gallon over the past two weeks, the biggest drop in two years, a nationwide industry survey found Sunday.

The average price for a gallon of self-serve gas nationwide Friday, including all grades and taxes, was about $1.65, according to the Lundberg Survey of 8,000 stations. That was a decrease of 10.23 cents per gallon from Sept. 12, the date of the last Lundberg Survey.

The drop was largely driven by an increase in supplies after a broken pipeline in Arizona and the East Coast blackout created shortages during August, analyst Trilby Lundberg said. Gas prices edged up last month and peaked Sept. 12 at about $1.75, she said.

"We're coming down from these highs in August," Lundberg said.

The end of the summer driving season also eased pressure on prices, while gasoline imports added to overall supply, she said.

The drop marked the largest since the terrorist attacks on Sept. 11, 2001. The weighted average retail gasoline price fell from about $1.54 to nearly $1.43 during the two weeks before Oct. 5, 2001.

Lundberg said a decision last week by the Organization of Petroleum Exporting Countries to cut production by 900,000 barrels as of Nov. 1 would not cause a surge in gas prices. Instead, prices would continue to fall, though not as steeply, because of a lower consumption season and increased competition among gasoline retailers, she said.

As of Friday, self-serve regular gasoline showed an average weighted price of $1.62 a gallon, with midgrade at $1.72 and premium grade at $1.81.