Gas prices leave room in holiday wallets

Bay Area drivers are paying less for gas this holiday season than last year and last month, AAA Northern California officials said.

The average gas price in the Bay Area is down 22 cents from last month’s survey on Nov. 10 and the average price in California is down 29 cents from a year ago, according to AAA Northern California officials.

Analysts expect average prices nationally to drop below $2 before the end of the year, AAA Northern California officials said.

AAA Northern California spokeswoman Cynthia Harris said:

“For consumers this is good news, especially for the holidays.”

Gas prices in all Bay Area cities surveyed by AAA Northern California staff dropped by double digits since last month’s survey, AAA Northern California officials said.

Of the prices released by AAA Northern California, the lowest price was in Tracy at $2.55 per gallon. Vallejo and Concord reported prices of $2.57 a gallon, AAA Northern California officials said.

San Francisco reported the highest price of $2.76, but San Francisco, Santa Cruz and Vallejo reported the largest drop in prices since Nov. 10 of 24 cents, according to AAA Northern California officials.

AAA Northern California officials attributed part of the drop in prices to a decision last week by OPEC to maintain its current oil production level. The decision has contributed to an oversupply of oil, leading to lower gas prices, AAA Northern California officials said.

Oil Price Information Service Chief Oil Analyst Denton Cinquegrana said about 1.25 to 1.6 million more barrels of oil are being produced a day than are being consumed.

Signs of oversupply are appearing in the U.S. oil market too, according to AAA Northern California officials.

The oversupply has contributed to lower crude oil prices.

The price of West Texas Intermediate crude, a benchmark for oil consumed in the U.S., is $39.97. Harris said:

“This is extremely low.”

The price was $140 in 2008.

The prices are not adjusted for inflation, Harris said.